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My startup banking story (2023)

mitchellh.com

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Re: My startup banking story (2023)

#161

Post by zie »

sneak wrote: post #136
mitchellh wrote: post #63

Earlier quoted context omitted.

Private client isn’t private bank. They name is like that so you think it is though. :) private banking services start around $10 to $15M with higher tiers as you go. (Not trying to diminish private client services. But they’re night and day different services.)

What’s the difference?

Private banking is basically the bank providing family office services. They generally give you one contact person, that makes your money annoyances non-annoyances. You need a loan for something, they just go sweet talk everyone involved to make the loan happen for you.

They also invite you to all the bank's private events, so you can schmooze with other high net worth people. Banks are always sponsoring fancy events everywhere, and private banking clients generally get free invites.

Re: My startup banking story (2023)

#162

Post by fakedang »

lackbeard wrote: post #27

This was a super-interesting read, but I'm disappointed there isn't a description of what, exactly, was wrong about what he did, and what one should do instead. The only thing that comes to mind is the obvious one: you don't want more than the FDIC limit in a single bank account.

Eh, depends. It's perfectly alright to put in more than the FDIC limit in a bank with consumer banking services. The amount of scrutiny and shit they have to put up with means that they can't really try SVB type shenanigans. You can bet your ass if Wells Fargo, UBS or Chase goes under, the Fed will bail them (you) out. The alternative would be having bigger problems in your plate than that.

Source: I'm a recent Credit Suisse business banking customer. Now UBS.

Re: My startup banking story (2023)

#163

Post by dragonwriter »

lackbeard wrote: post #27

This was a super-interesting read, but I'm disappointed there isn't a description of what, exactly, was wrong about what he did, and what one should do instead. The only thing that comes to mind is the obvious one: you don't want more than the FDIC limit in a single bank account.

> you don't want more than the FDIC limit in a single bank account.

If the FDIC limit is a concern, you don't want to make the mistake of thinking it applies on a per account basis (it applies per depositor per institution per account class.)

Re: My startup banking story (2023)

#164

Post by fakedang »

phil21 wrote: post #149
jackvalentine wrote: post #103

Earlier quoted context omitted.

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.

Banking works as a store of money and money mover until they decide what you are doing is outside the normal course for their average account holder. After that you very rapidly get educated on the fact that money within a bank is not your money - it’s the banks money and they are not afraid to more or less tell you that outright. There is very little recourse once you hit some internal KYC/AML or other “non-desirabl…

> After that you very rapidly get educated on the fact that money within a bank is not your money - it’s the banks money and they are not afraid to more or less tell you that outright.

The author's experience says otherwise. He even muses about how it only cost him 30 bucks to transfer 35 M and it was done almost immediately.

Re: My startup banking story (2023)

#165

Post by immibis »

FinnKuhn wrote: post #148
nshelly wrote: post #88

When I was an American PhD student in Zurich, none of the Swiss banks would accept me—except the official post office bank. This was due to the stringent FATCA laws, which made U.S. citizens too burdensome for the traditionally privacy-centric Swiss banks. Within the first few months, I accumulated around 40K CHF in salary that the university owed me (technically from the Swiss government, since researchers were fede…

One thing that has always amused me as a German is that for every banking/investing account I have ever opened they always included one question: Do you have an USA citizenship? I assume with online banking this has become less of an issue, but apparently having US clients as a non-US bank is a massive hassle that no one wants to touch.

It's still a thing. The US thinks it's hot shit, wants banks all over the world to comply with extra requirements for US citizens, which no other country does. Banks don't want to deal with it. Ordinarily they'd just ignore stupid requirements coming from stupid countries like China, but when it's the US they don't want to be sanctioned.

Thankfully, the US is now trying to delete its special position so we may soon be in the situation where stupid requests from the US are treated the same as stupid requests from Russia.

Re: My startup banking story (2023)

#166

Post by aetherson »

robocat wrote: post #141
robocat wrote: post #82

Earlier quoted context omitted.

> but rather to "maintain your business." If banks want to keep a customer, you might think the most important thing is to just not annoy or screw over their customers. Why do they continually treat good customers like shit? I'm in New Zealand and my bank just continuously pisses me off. I don't want any upsell (the arseholes tried to upsell insurance when I got a credit card the other day). I've got a six figure fac…

Great article on this: https://quoththeraven.substack.com/p/every-industry-is-an-ov... I hand the cashier my credit card. She looks at me like I’ve just asked her to barter goats for spices. “Can I have your name?” she asks. “No,” I reply. “You can have my money.” Then comes the phone number. Then the email. [] Finally, after this interrogation, I’ve spent $300 and she asks if I’d like a bag. Of course I want a fucki…

I also find it annoying when retail stores try to sign me up for marketing emails, but I'm not real sure this is a relevant comparison to the effort of banks to engage with a business customer who has deposited multiple tens of millions of dollars with them.

Re: My startup banking story (2023)

#167

Post by elzbardico »

gwbas1c wrote: post #20
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?

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…

I thought he was very lucky his account didn't get flagged by Chase. Big Banks have a really hard time understanding startups, and the whole post 9/11 institutional paranoia (that the bank bureaucracy takes to the heart) just made things way worse.

Re: My startup banking story (2023)

#168

Post by jackvalentine »

TZubiri wrote: post #113
jackvalentine wrote: post #103

Earlier quoted context omitted.

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.

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…

> Money is a very complex subject, the fact that you think of money as "something that is stored in a bank" is testament to the fact that banks do a good job, it's an illusion

Thanks for assuming I’m stupid, rather than engaging with what I actually said.

You didn’t explain anything, just wrote a bunch of words about ‘it’s so complex!’ Everything you said is basically motivations for the bank. If I’m happy with the fees and the simple relationship… don’t call me unless there is a problem. As TFA points out you can absolutely do that and ignore everything else you wrote. The guy did it quite successfully.

Re: My startup banking story (2023)

#169

Post by [deleted] »

fakedang wrote: post #164
phil21 wrote: post #149

Earlier quoted context omitted.

Banking works as a store of money and money mover until they decide what you are doing is outside the normal course for their average account holder. After that you very rapidly get educated on the fact that money within a bank is not your money - it’s the banks money and they are not afraid to more or less tell you that outright. There is very little recourse once you hit some internal KYC/AML or other “non-desirabl…

> After that you very rapidly get educated on the fact that money within a bank is not your money - it’s the banks money and they are not afraid to more or less tell you that outright. The author's experience says otherwise. He even muses about how it only cost him 30 bucks to transfer 35 M and it was done almost immediately.

[deleted]

Re: My startup banking story (2023)

#170

Post by dml2135 »

epolanski wrote: post #123
dml2135 wrote: post #83

Earlier quoted context omitted.

This is everything in Italy, not just banking. I remember studying abroad there, it took us a week and a half of “domani” to get the wifi password for the dorm!

I'm Italian and both the previous story as well as your comment trigger me. 1) You could've asked the password to literally anybody in the dorm. 2) Unless this was geological ages ago, by law, all you need to close a bank account is a certified email (or PEC) or a certified letter (you go to the post office with a document and a simple form that specifies where you want your stuff transferred) you don't need to go in…

It was a long time ago but from what I remember it wasn’t that simple. We needed the IT guy to set us up with individual accounts, and we could never get a straight answer on when he would show up.
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