You think the CEO of a 100 person startup should be worried about something like a bank run happening? It's not the 1920s. Most people don't ever consider that money in their bank could disappear for no reason.
Next you should tell me they should worry about "the big one" hitting Silicon Valley which we know the actual odds for and people still seem to live there.
> Most people don't ever consider that money in their bank could disappear for no reason.
The $250k FDIC account limit was really well known, so I'd expect someone in the CxO ranks to have it properly managed in a 100 person startup. CFO maybe?
Several people have mentioned over the last few days that spreading $$$ across a bunch of ($250k limit) accounts at banks is a service offered by third parties, to address this very risk.
Wonder what the cost of using such a service would have been, and how many SVB customers were using it?
Anyway, with the current US regulatory approach of "oh shit, lets cover all deposits anyway" I wonder if those services have a future...
Just wow. "Money Saving Expert", a UK website which gives pretty decent advice for the average person in the UK mentions the government provided insurance limit for deposit accounts (£85,000). Anyone reading that site knows their money could be lost if they have more than the limit in any single bank (or multiple banks where a subsidiary shares the owner banks insurance).
But then again it doesn't really surprise me that an SV CEO would have no concept of deposit insurance. They live in a different world.
> Most people don't ever consider that money in their bank could disappear for no reason.
Geez. Let’s hope you’re wrong. Financial illiteracy is bad news in a society built on markets.
I can’t speak for “most people” and especially not people in Gen Z, but otherwise, as a matter of fact, many people do think about that and manage their money accordingly.
>> Next you should tell me they should worry about "the big one" hitting Silicon Valley
The big one as well as this banking debacle should both be on your radar, yes. You are in this for the money. You have money but you want to increase the amount by orders of magnitudes. So you gamble.
You gamble on lots of things so that you spread the risk. Gamble gamble gamble.
Hey, you know what? I sat on three different poker tables this evening. Lost all. I'd like my money back. Now, please.
I'm just some jackass that knows about FDIC limits and how they (used to) work, and I'm as far from a CEO as I can be. I absolutely expect CEOs to be thinking about this stuff.
And most of the feasible scenarios in which banks start collapsing so quickly and widely that depositors end up with barely anything left bar the FDIC insurance are scenarios in which the economic outlook is so grim your startup that's relying on rapid growth and further funding to survive isn't going to make it anyway.
Admittedly, picking a startup as a bank increases that risk somewhat, but so does picking a startup to provide your CRM system or web platform or other mission critical stuff that's a lot more likely to be shut down with minimal warning, or indeed choosing to raise funding from a VC that wants you to 20x or bust...
I'm a nobody who got some startup lotto monies that were in excess of FDIC limits. You know what I did? I used multiple banks.
If you are not planning for "the big one," you are, again, accepting risk. My parents did not have earthquake insurance in SoCal in 1992 and had to start thinking about how they were going to repair the collapsed chimney on our house. I also didn't carry earthquake insurance on my SoCal house, knowing full well it is a risk. My mitigation being stocking up on food and water and having alternative sources of heat.
> You think the CEO of a 100 person startup should be worried about something like a bank run happening?
Yes. Not specifically a bank run, but bank failure. Cash is the lifeblood of a company. Let's not worry about our cash becoming unavailable, in a bank that buys risky assets with our cash, in a perilous interest rates environment, "cuz it's not 1920."
But not the CEO of a 100 person startup.
100 people is large enough to have a substantial amount of human time available for use, and likely budget as well.