Why would VC firms urge their founders to all use the same bank in the first place? Seems like a recipe for Bad Things™...
(I assume the answer is some combo of laziness and kickbacks and old boys club and such...?)
(I assume the answer is some combo of laziness and kickbacks and old boys club and such...?)
It's been a mutually beneficial relationship for 40 years.
Surely there are enough banks and bankers around that you could have half a dozen or more specialists? It's knowledge work, not something needing billions in physical infrastructure investment.
This has to do with deposit specialization which I don’t know if it’s been studied, but you could see the same arguments applying to.
But if you're a VC with a broad portfolio, you're much more exposed to the single-point-of-failure risks that come with increased efficiency.
"Give up some efficiency for system robustness and long-term-health" is a no-brainer for mature engineering orgs, but in this financialized world nobody can see the longer term big picture