As an individual, you have much lesser money to spread around than a company. If a company with 25+ million in cash has to manage more than 100 accounts, they are more likely to make some other banking mistake and lose some of that money through some administrative mistake.

That said, I sympathize with your broader point. With hindsight, it would make more sense for a company to have a brokerage account, and do something like invest their cash 1/3 each in 1-month/2-month/3-months Treasuries, rolling over every month.[1]

But most tech CEOs/founders of tiny startups probably don't know much about finance, and I can't really blame them for just putting their cash in a large bank.

[1] There's a startup opportunity to build this product right now, a pure custodian-style cash-management "bank" for small companies.