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Comment by KRAKRISMOTT | Hacker News Reader

They don't have much agency in this. Go with a typical "small business account" meant for mom and pop shops at a bigger bank and you miss out on all the advantages of a more dynamic bank like SVB. Your investors would be asking questions. Collectively agree not to create a bank run, your investors would still ask questions.

Unless you are fully bootstrapped with no major cashflow issues, there are no right answers to this.

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Oh, so they, wanting an advantage, made a choice that turned out to have some downsides as well? That sounds like a situation where they have plenty of agency to me. Especially when there are alternatives like putting their eggs in two baskets.

I bet you are one of those people who insist that companies making under 1mil ARR should support multiple auxiliary payment providers in the event you get your funds frozen by the Stripe/PayPal. The infrastructure providers need to do better, the burden should not be on small businesses to account for the cost of black swan structural failures. Words are cheap when you only work for well capitalized large corporations because your personal check book is rarely impacted aside from short term unemployment.

What?

The burden is not on small businesses. Most small businesses don't just have well over a quarter million dollars in cash just lying around collecting dust. And the few that do can open an account at second bank. It's not rocket surgery.

Beyond that, if they have the kind of cash flow where they need millions in cash sitting around, they should hire a finance professional. For many, many reasons, bank failure risk being a very small part of it.

> on all the advantages of a more dynamic bank like SVB

Then the CEOs/business owners going that way should fully ascertain and support the associated risks.

SVB doesn’t exactly go around publishing the details of their internal operations. Do you expect a small startup without significant ARR to question SVB’s treasury managers before opening an account?

No but their quarterly statements do have relevant information, if someone wants to dig around. One would assume that if people spend hundreds of thousands of dollars on AWS (someone to manage their compute), they would spend some time doing due-diligence on the financial institution where they choose to park their money.

What evidence is their that this due-diligence would conclude SVB was any more risky than a different bank? They bought US government bonds, this is not an FTX situation.

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