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Comment by 58028641 | Hacker News Reader

There are banks that sweep the money across various other banks automatically.

Things I learned in Econ 101 like 25 years ago, and one of about four options if you google "how do companies manage payroll with fdic limits".

But people with [mb]illions of funding just plopped money in a single account ..

Indeed, most of SVBs customers were those who had almost zero business finance experience. There were lots of startups but there were also lots of normal businesses and non-profits in the Bay Area that used SVB.

Perhaps the slow depositors should be punished for not being sufficiently sophisticated, or as quick as the Thiel-backed startups that got the bat-signal to do a bank run. But the "moral" value of letting all those organizations lose their deposits is very low. The moral value of letting SVB fail, which it did, seems high to me!

> Indeed, most of SVBs customers were those who had almost zero business finance experience. There were lots of startups but there were also lots of normal businesses and non-profits in the Bay Area that used SVB.

The thing is that you don't need to be a financially sophisticated. Why are they making companies without talking to a CPA? They can get an account with PayChex and they will literally handle everything related with payroll. If your average mom and pop restaurant didn't do this we would fault them for being irresponsible.

They disrupted financial sophistication

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