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My startup banking story (2023)

mitchellh.com

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Re: My startup banking story (2023)

#151

Post by csomar »

gspencley wrote: post #19
bigstrat2003 wrote: post #11

Earlier quoted context omitted.

I read the whole story and I'm still struggling to understand what you did wrong here. You indicated many times "I know, that was a mistake" (or similar phrases), but each time I was baffled because I saw no mistakes. It was your business, and you had every right to move around the funds within your account. What gives anyone at Chase the right to say diddly squat about how you manage your business' finances?

I don't think he was trying to imply that he did anything wrong. He was admitting the ignorance regarding how banks and banking work... plus acknowledging that a lot of readers will have had experiences that would make them think "Oh you young fool." In 2022 I lost my business banking and had to shut down a business that I owned for 20 years because it was related to the adult entertainment industry and, despite bein…

> You NEVER admit that you're in this industry you moron!

This can bite you, though unlikely. Look at Fed Lisa Cook. Probably at some point she thought it'd be okay and she's good for the money and it's just a bureaucracy to bypass. It's a very small thing if you compare to ... uhm ... what Trump did. But it's biting hard now.

Re: My startup banking story (2023)

#152

Post by gspencley »

sneak wrote: post #55
gspencley wrote: post #19

Earlier quoted context omitted.

I don't think he was trying to imply that he did anything wrong. He was admitting the ignorance regarding how banks and banking work... plus acknowledging that a lot of readers will have had experiences that would make them think "Oh you young fool." In 2022 I lost my business banking and had to shut down a business that I owned for 20 years because it was related to the adult entertainment industry and, despite bein…

Chargebacks. Tons of people buy porn on a card then later deny it when their SO finds the bill. The industry is rife with this kind of fraud, and chargebacks represent tangible risk of financial loss, so banks just blanket ban working with certain industries. People who sell precious metal jewelry for credit card payments are another.

Nothing to do with charge-backs as our bank was not providing payment processing for us. We ran a "free site" that made its income from referring subscription sign-ups to paid sites through their affiliate programs. We sold nothing direct to consumer. Our customer was other adult websites.

The banking services they terminated consisted of a single business checking account, business savings account and company credit card. That was it. That was what they deemed "too risky."

We learned from someone who used to work at Chase's compliance department that most big banks just have a flat-out ban on working with any customers that are involved in the industry in any capacity what-so-ever due to concerns over serious things like human trafficking. It was the fact that we were distributing [lawful and traceable to the producer] content that made them not want us as a client.

Re: My startup banking story (2023)

#153

Post by Workaccount2 »

stephen_g wrote: post #62
gwbas1c wrote: post #20

Earlier quoted context omitted.

TFA didn't really explain the mistake. What I think it was: 1: Chase's business account wasn't appropriate for a tech startup; nor was it appropriate for the amount of money Mitchell was handling. 2: When your bank calls you after a very, very large money transfer, you should take the call. That being said: In today's world where every other phone call is some telemarketer trying to scam you or otherwise sell you som…

They basically had no problems through $35M+ of money coming in except a few phone calls trying to sell him some banking services... I wouldn't really call it 'not appropriate' for a startup... All it was is probably the guy trying to say "hey maybe you'd be interested in parking some of that capital in a term deposit" or offering some credit products... It is a bit weird how actively the guy tried to engage but it p…

My guess is that there were millions sitting in a checking account earning 0.015% interest.

Interest rates weren't great back then, but even still you could get 1.5% easily.

All in he probably left a few hundred thousand on the table.

Re: My startup banking story (2023)

#154

Post by gwbas1c »

Animats wrote: post #117
gwbas1c wrote: post #92

Earlier quoted context omitted.

> You said you were "advised to adjust" your account. Again, I apologize if I come across as ignorant, but what kind of adjustments? A few months ago, a teller offered to move my savings account to a higher interest version. I just had to maintain a minimum balance. A similar thing happened when I had my first summer job before college: A teller offered me a higher-interest money market account, it was just limited t…

> I'm going to assume that Silicon Valley Bank has products built around the fact that a startup has a large sum of money that it spends very slowly, versus a restaurant that needs loans and spends money as quickly as it comes in. That's what SVB assumed, and they were very wrong.[1] [1] https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Ban...

Sounds like they got greedy:

> Some banking experts said that the bank would have managed its risks better had it not been for the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), enacted in 2018 and supported by SVB CEO Greg Becker, which reduced the frequency and number of scenarios of required stress testing implemented under the Dodd–Frank Wall Street Reform and Consumer Protection Act for banks with under $250 billion in assets.

Re: My startup banking story (2023)

#155

Post by TZubiri »

toast0 wrote: post #124
TZubiri wrote: post #114

Earlier quoted context omitted.

Lots of local branches sounds great for personal banking, but for businesses? Unless you have a nation wide franchise business or a logistics business, doesn't seem as important. On the contrary, a highly concentrated bank might be better, everyone is on the same building, there are no encapsulated branches, you get assigned a banker that is the best fit, rather than the one who was born closest to you.

Depends... If you want to be able to go in and do business banking when you're visiting your parents? Might be nice. I dunno.

The thing is that if there is a single branch (or few branches), then there's processes designed to be able to be completed remotely, with phone calls or faxes, etc...

When the bank has many branches, there will always be some steps that require visiting the main branch, and the opening branch.

With a single branch bank, the main branch and the opening branch are one and the same. And it's the best branch.

Re: My startup banking story (2023)

#156

Post by TZubiri »

delusional wrote: post #120
TZubiri wrote: post #113

Earlier quoted context omitted.

I can explain a little bit 1- KYC, the bank is a highly regulated entity, regulated by the state, they are a branch of the executive, they enforce banking laws set by the legislative, and can get involved in cases of fraud, money laundering, or other illegal activities. If they see a million dollar transaction, they usually want to know where the money came from, if they don't they would essentially be looking the ot…

> similar to how there's a lot going on behind the scenes in Google or ChatGPT I would caution against maling this sort of comparison to tech companies. Speaking from personal experience, my vantage point is limited to Denmark, but banking isn't complicated like tech is. In tech the complications are all self inflicted, all serve to make the product. Banking interacts directly with the foundation of society. Most of…

Borrowing some lexicon from the Zen of python, what you are saying is that tech is complicated but banking is complex.

Regardless, it is still a case of a simple UI and a complex (complicated implies complexity) backend.

Re: My startup banking story (2023)

#157

Post by insane_dreamer »

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…

Couldn't find the RSS feed for your writing. Available?

Re: My startup banking story (2023)

#158

Post by randomsofr »

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…

Congrats on the success! I’ve had a similar experience since I started moving more money around. My local branch started calling me too. I live in a busy area where lines at the bank can take hours, but now they told me I can just message someone whenever I go and they’ll move me to the front.

The other day I was just poking around the investment section of the app to see what kind of rates they offered, and almost immediately I got a call from my personal banker, haha. I actually ended up trying the investment since the returns looked good.

Re: My startup banking story (2023)

#159

Post by mierz00 »

benhurmarcel wrote: post #125
mierz00 wrote: post #107

Earlier quoted context omitted.

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…

Sounds like your experience was some time ago. Banking with “traditional” banks is still slow and bureaucratic, but not to that point. And online banks let you do everything online quickly.

I wouldn’t call 2020 that long ago. But you’re right my main mistake was not going with an online bank at the time.

That being said, French administration sucks overall. The amount of paperwork required is insane.

Like the time my wife and I got married. Her paperwork was straightforward however I was born in a different country to my nationalities. This just did not compute for them. 10 months later including travelling overseas to get the documents, they call my wife to tell her they lost our file and we need to start again!

Haha the thought of bulldozing the town hall came to mind. Luckily they found them not long after.

Re: My startup banking story (2023)

#160

Post by astrange »

thrown-0825 wrote: post #128
astrange wrote: post #79

Earlier quoted context omitted.

File a CFPB complaint. Or email executive/investor relations.

I see you are operating under the idea that the US still has consumer protections and isnt a gutted husk of what it once was.

It's not an oppositional approach. It mostly works because someone at the bank reads it who actually has the power to do something about it. Any other way that skips level-1 customer service would also help.
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