We weren’t dumping money, SVB was our primary bank where sales we’re collected. It’s not hard to exceed 250k after 10 years of operations.

We weren’t getting any interest % on our deposit balance, the only reason we chose SVB was because it was recommended for Startups.

What financial advice was that? That SVB was a good bank for Startups to use? It was the recommended bank by our Merchant Provider Stripe.

Sure it’s easy to identify poor choices after the fact.

It seems like a bad idea to have a large amount of static cash sitting in an account unbacked by any asset, regardless of who is your primary bank.

It seems to me, your financial advisor should've had a plan for rolling this cash through CDs or short term bonds and distributing it across multiple institution to decrease your exposure or at the very least increase your FDIC insurability.

> It seems to me, your financial advisor should've had a plan for rolling this cash through CDs or short term bonds and distributing it across multiple institution to decrease your exposure or at the very least increase your FDIC insurability.

Who do we hire to plan and manage this process to ensure we have adequate cash flow? Why would any small or medium size business take on this overhead? When some other part of the financial system endangers whatever mechanism we were using here, will you be back asking why we didn't just keep money in a bank somewhere?

I'll be blunt: You're not that smart. You're not that experienced. You're not an expert on managing "FDIC risk" even if you read about it this weekend.

> When some other part of the financial system endangers whatever mechanism we were using here, will you be back asking why we didn't just keep money in a bank somewhere?

No. The point is that a bank is better than a safe but that diverse assets are better than a bank.

> You're not an expert on managing "FDIC risk" even if you read about it this weekend.

Exactly. And this is why, if you have a critical business dependency you should hire an expert and not ask my advice which the parent poster did.

> you should hire an expert and not ask my advice which the parent poster did

Sorry, who has asked for your financial advice exactly?

The commenter asked me what financial advice I thought was poor.

> What financial advice was that? That SVB was a good bank for Startups to use? It was the recommended bank by our Merchant Provider Stripe.

> Sure it’s easy to identify poor choices after the fact.

My reply was purely in the context of that question. You yourself asked further advise here.

> Who do we hire to plan and manage this process to ensure we have adequate cash flow?

> The commenter asked me what financial advice I thought was poor.

I did not, you had just assumed we followed some poor financial advice for having chosen SVB in the first place:

> I think you were following some very poor financial advice.

Which I asked you to clarify as we never sought any financial advice. SVB was chosen because it was recommended to use for Startups.

> You yourself asked further advise here. > Who do we hire to plan and manage this process to ensure we have adequate cash flow?

I never asked this, nor would I ever dutifully seek the financial advice from random internet commentators who's become experts at predicting bank failures after the fact.

My bad. I mixed up commenters on that last bit.

> Which I asked you to clarify as we never sought any financial advice. SVB was chosen because it was recommended to use for Startups.

Right. And what I'm saying is not that the bad advice was using SVB. Of course you can't predict which bank is going to fail. That's kinda my whole point.

When I said I thought you got some poor financial advice, I was assuming you had a financial person who put your money in this vulnerable position. Which I guess wasn't the product of poor advice but of getting no advice at all.

All our efforts are spent on improving our products, we've never sought any financial advisors and spent exactly zero time worrying about the liquidity of the bank we're with. Any funds left over from business operations are simply left in the bank they were collected in.

But sure after knowing this event is possible and that effectively all small US Banks are at risk of a Bank run we'll be moving to a top 3 bank that's too big to fail, then go back to focusing all our efforts on improving our products as usual.

For your own sake, pay someone to help you with this. It doesn't need to be someone full time. You can use a consultant. You are not protected even with a big bank. Given the way the political climate has developed, if there's another "big one" even a fraction of this size of 2008, it may be politically impossible to wrangle another bailout. Your only protection is diversification.

No, I don't need to pay for an external consultant's help to tell us to spread our funds over multiple accounts to fit within 250k FDIC insured limit. If any of the top 3 "too big to fail" US Banks collapses we'll all have bigger problems resulting from the collapse of the US Banking system.

Cool. Suit yourself. You got lucky this time and are getting bailed out.

> we've never sought any financial advisors

No accounting firm??

Our accountant helps facilitate our tax obligations, they don't provide financial advice on our banking choices.

Love to see people coming AFTER, telling everyone how wrong they were.

Did you short SVB? You must have known it was coming right?

What? I'm literally saying the opposite. Not that you should try to predict the future and pick a winner but that you cannot possibly know who is a winner and who is a loser and therefore you should be diversified.

Just depositing all your money to one account seems like a neutral activity but it is not. It is in fact an implicit bet. It is a statement of faith in the institution who holds it, whether you realize it or not.