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My startup banking story (2023)

mitchellh.com

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Re: My startup banking story (2023)

#101

Post by merek »

> I never told them what my business does or what I'd use the money for.

This stuck out to me. I'm in the process of opening a bank account in Singapore for a newly registered company, and boy is it difficult.

Hour-long KYC interview. Details of what the business does. Anything remotely controversial could be a red flag. They want to hear about boring B2B services. They want to see evidence of customer communications or contracts, so they can see you're a legit business and not a shell company. This is very difficult for a company that hasn't started operating yet. Why would I start operating without banking? How can I show business activity before commencing operating?

By comparison, I've opened business accounts in both AU and the US without hassle.

Re: My startup banking story (2023)

#102

Post by fakedang »

bigstrat2003 wrote: post #33
chao- wrote: post #31

Earlier quoted context omitted.

Your answers are appreciated, but they beg further questions. Do you mind that I inquire further? >1: Chase's business account wasn't appropriate for a tech startup; nor was it appropriate for the amount of money Mitchell was handling. What properties make it inappropriate for a tech startup, specifically? What would be appropriate instead, and why? >2: When your bank calls you after a very, very large money transfer…

> He did take the call, but I take your answer to mean that Mitchell and Alex didn't have the right kind of conversation on the call. Is that correct? If so, what ought to occur on a call that follows a large transfer? I would echo this question. If my bank called me and asked if I needed help, why would I say yes? I got money, the bank is holding it, everything is going great! This really feels like Alex was trying…

Honestly this was partly on Alex, but again, largely on Chase's banking practices. When a transaction of that size comes on the radar, you don't just ring up compliance to verify records internally. You also bring in the big guns from Main Office (aka the regional business banking HQ) and, along with Alex (as the point of contact), educate the business customer as to what can be done. This was what happened to me at Credit Suisse (RIP) after I had a similar, albeit smaller, transaction happen for my personal account. They were also extremely helpful when I wanted to get started with setting up my current trading business. Oh, and I'm still in touch with most of the people who helped me through that journey, even though they've left for other shores.

But again, Alex would not have been able to do this because Chase might not have had any policy about how to redirect customers to the appropriate type of banker. Which is kind of stupid for a megabank of its size.

Re: My startup banking story (2023)

#103

Post by jackvalentine »

recursive wrote: post #32

The author imagines that all readers obviously know why his actions were so wrong. My understanding of banks is much like his naive version. So what's the more enlightened understanding?

Yeah I'm not sure why I would really care about the motivations of the bank. If I need them to be a store of money that I can move in and out and I'm happy with that then leave me alone.

When you're big enough for that to be a problem, like in the story, then someone who knows more that you've hired will have a stronger opinion of that.

Re: My startup banking story (2023)

#104

Post by fakedang »

merek wrote: post #101

> I never told them what my business does or what I'd use the money for. This stuck out to me. I'm in the process of opening a bank account in Singapore for a newly registered company, and boy is it difficult. Hour-long KYC interview. Details of what the business does. Anything remotely controversial could be a red flag. They want to hear about boring B2B services. They want to see evidence of customer communications…

It's likely because of the nature of the country. Singapore and the UAE (another similar country) are notoriously difficult for getting started with business banking because banks often expect you to be either well-funded (from elsewhere) or matured as a business. For a long time, they haven't ever evolved their thought to expect startups to natively grow, and even of late, they expect startups to be these well-capitalized entities with angel/VC funding. That, I presume, is because of the fact that these countries tend to be conduits for money rather than destinations themselves - they'll roll out the red carpet for you if you went with another, more "matured" objective in mind like laundering money or expanding into the country.

On the other hand, Switzerland has been surprisingly very easy to get started with quickly, even though Switzerland falls in the same category. You can easily obtain a (shitty service) Postfinance account to get started, and UBS is a breeze to work with, despite being bulge-bracket - even for new companies. Or you can also opt for a cheaper Kantonalbank, which are surprisingly very open to new businesses.

Re: My startup banking story (2023)

#105

Post by ceejayoz »

EarlKing wrote: post #99
edm0nd wrote: post #75

Earlier quoted context omitted.

That's why adult industry merchants are a thing, like CCBill. They have been around for decades and its kind of a non-issue. Can still accept Visa, MC, AMEX, etc. source: used to run porn websites back in the early 00s.

How does something like CCBill stay in business when the card networks themselves have strict guidelines on chargeback rates that'll get you booted from the network?

Presumably, such merchants are basically outsourcing their chargeback resolutions to CCBill, who I assume is quite good at fighting them via proof of purchase.

Re: My startup banking story (2023)

#106

Post by zie »

dpkirchner wrote: post #34
mitchellh wrote: post #8

Funny to see this pop up again (I'm the author). The year is now 2025 and I still use Chase as a personal bank and I'm now discovering new funny banking behaviors. I'll use this as a chance to share. :) My company had an exit, I did well financially. This is not a secret. I'm extremely privileged and thankful for it. But as a result of this, I've used a private bank (or mix) for a number of years to store the vast ma…

At what point does it make sense to sign up for private banking? I've been happy with our credit union for day to day stuff but we don't keep a ton of cash around (most of our money is in a brokerage account (ETFs)). Is private banking just for folks that want to have a lot of cash around but not have it in an easy to use account?

If you have to ask, the answer is you don't have enough! :)

Seriously though, just wander into any big ass bank(Chase, BOA, etc) and ask them. They have multiple tiers of private banking, depending on your wealth level. Generally the bottom tiers start around $100k and go from there. To get into the fancy tiers you generally need $1M or more of bank assets. To get into family offices, you generally need $100M or so. Though shared family offices are sometimes available at the low 30-50M range.

Just be very careful of fees. Generally the larger the private client services, the higher the fees.

Re: My startup banking story (2023)

#107

Post by mierz00 »

josh2600 wrote: post #70

Once upon a time my wife went to close a bank account in Italy. She went to the post office which is also a bank in Rome. She asked to closed her account. She was told that she needed to go to the branch where she opened her account in Florence. We rented a car and drove to Florence. When we arrived at the bank in Florence, the teller informed us that we would have to come back “domani” which is Italian for tomorrow…

I have a similar story in France. Closing an account with Caisse d’Epargne was nothing short of pure torture.

Luckily, I didn’t actually have to go in, but the process took me nearly 6 months of back and forth, multiple phone calls, multiple hand written letters. Yes, France loves hand written letters, no you cannot type it.

Every now and then I think it would be nice to return and live in France, but the thought of having to deal with French administration has vaccinated me for life.

Re: My startup banking story (2023)

#109

Post by TZubiri »

jancsika wrote: post #46

> Ultimately, there was no long term negative impact of the events that transpired (except maybe for Alex, but I truly don't know) and I can now look back on it with amusement. So a software guy who didn't understand people or banking opens an account at Chase. And a guy from Chase who didn't understand people or software calls him-- repeatedly over years-- and fails to ever connect on any human level whatsoever. Now…

This is one of the takeaways I wasn't able to formulate. Author added some disclaimers which already clarified their inexperience with the world. But I think that a.. preference for avoid human interactions, and a worldview of computer systems with no human systems are what explains why Author wasn't able to quickly adapt to this adult experience.

What sealed the deal of this interpretation to me:

"He literally writes down a phone number on a piece of paper. This is all feeling so surreal."

Why would this feel so surreal? Gauging by the dates, Author was born in around 1994, phones where definitely a thing, and phone numbers more so. My interpretation is that this guy was absolutely absorbed in computers, every social interaction occured in dms, or emails or posts, or articles. Both the 'unsophisticated' act of transmitting numbers and the need to deal with a human in real time were foreign. Without going into harsher labels like autism or antisociality, I think it's definitely the type of behaviour (described as being heads down), that is necessary to be competent enough with computers to build a hypertechnical security product over the span of almost a decade.

The point of view of the banker and how he fumbled this as well is a nice touch, illustrates the advantages of throwing a bone to your business partners. I mean even if you think of it from a non social perspective, only business, this is a supplier like any other, loyalty and gifts go a long way in general. But I guess that you don't need business acumen for a startup, you can just hyperfocus on your product and have your investors worry about the rest.

Re: My startup banking story (2023)

#110

Post by TZubiri »

gck1 wrote: post #58
jancsika wrote: post #46

> Ultimately, there was no long term negative impact of the events that transpired (except maybe for Alex, but I truly don't know) and I can now look back on it with amusement. So a software guy who didn't understand people or banking opens an account at Chase. And a guy from Chase who didn't understand people or software calls him-- repeatedly over years-- and fails to ever connect on any human level whatsoever. Now…

Banker was probably asked daily by his managers if the multi-million dollar client was happy and the banker probably always responded with-yes, very.

I think daily is an overstatement, but it does sound like the guy took credit for some type of relationship that wasn't there, which is kind of unnecessary because maybe what he did was the right move, he gave the client exactly what he wanted.
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