> Someone out there is probably mentally screaming at me "you fool!" at this point.
These are each clearly building up to "some explanation" of what the author should have done instead, indicating precisely what his foolish actions were and why. Perhaps we're just supposed to know that, but this is never directly explained in the story and I found it a little upsetting.
> Perhaps we're just supposed to know that, but this is never
> directly explained in the story and I found it a little upsetting.
The default for business accounts in "traditional" banks is that they're handled by a specific named account manager, who is given the credit (or blame) for that account's growth over the years. So walking into some remote branch and opening an account will tie that account directly to the political success of whoever was sitting across the desk from you when you signed the paperwork.
It's a failure mode that doesn't need an explanation to people who are the expected audience of the article. In software terms, imagine an article about launching an MVP that starts off with "so I copy-pasted some PHP from StackOveflow and ran it with default permissions in the same database that stores customer credit card details ...". There doesn't need to be a long digression about why that's bad.
I don't think the end user of a bank's services can or should be expected to know about, or take this factor into consideration when choosing to close their account or drastically change how they use it, however.
It's not personal, it's business, and to a certain extent any large US domestic bank is functionally equivalent to the other in features, fees and risk level.
If I closed everything I have with Wells Fargo tomorrow and reopened it with BOA or Chase I would expect about the same functionality.
Traditionally, businesses establish relationships with their banker (a person), who helps steward their accounts, apply for loans, understand and pursue savings and investment options for held balances, etc
Banking organizations are built around this very very long-standing model. There are processes and spreadsheets and powerpoints and dumb little mugs for high performers and all those things.
Clearly, with the consolidation of banks and the pervasiveness of online banking, this is in the process of changing. This story captures one of those transitional moments, where a young kid with a startup is completely blind to what bankers expect to be doing.
But your version of “how things are” is very contemporary, and wasn’t quite the way of things when this story takes place.
He was just clueless to how banking worked at the time and how bankers expected to be involved with helping new clients gradually grow their banking relationship.
He was a young kid who intuitively engaged in anonymous, electronic, modern banking before bank branches were really there themselves.
To young people who came up after him, his intuitive way became more the norm — especially for VC startups — and the idea that you might buy your banker a bottle of nice whiskey for the holidays makes no sense. But for Alex, the banker, who had a kid come in and grow an account to $35M and then silently drain it without ever consulting with him, the whole experience was alien and absolutely bewildering.
You can think of it as a culture clash or maybe a missed opportunity. More awkward than wrong.
For personal banking, absolutely. But the property management business I bought, and then sold, had dedicated account managers at both banks we used, and both they (and the previous owner of my company) had an expectation of personal contact and fairly regular conversations--both because our customers also used those banks, but also just because it's the norm.
This was in 2020, for reference.
Business banking isn't all startups.
[edited below - because threaded comments can come across wrong]
I wonder if how Alex's boss would tell this story is - my employee landed a $35m account, then failed to manage the account successfully, and when $35m walked out the door, we never understood what we did wrong
I don’t know about you, but it seemed fairly obvious to me that our protagonist didn’t see the bank as anything other than a convenient stash of money.
If our protagonist saw a bank as a convenient stash of money, then that's all it was for him. If it were to be anything else, Alex would have been the person who would inform him of that, something he clearly massively failed to do.
If I happened to start a startup and be given a $35M check, I would do exactly what the person in this story did, for the same reasons, and unless a bank person told me otherwise I wouldn't think anything more of it. A bank is a bank is a bank until they demonstrate otherwise to their customer, not the other way around.
Kinda what happened to SVB. They’d likely have been fine if they didn’t tell people they needed money.
Move along, citizen.
Anecdotally I've worked for a company that bought a lot of lasers. Like, really, a lot. Enough lasers to make the laser vendor fly our sales representative out to our city and hang out visiting us for a few days. They would offer to take the whole team out for dinner and drinks. It was just weird and uncomfortable. I have other things to be doing with my personal evening between 5:30 and 9pm.
It's like concierge banking, you get 1 person that will just make all of your bank and finance problems go away. You need a house loan, your person would just make it happen. You need financing, they can help with loans, going public, seed rounds whatever you need. They can also help you locate attorneys to help draft financial contracts, etc. Tax specialists that can help you minimize taxes, etc. There isn't much of a limit around both personal and business finance they wouldn't at least help get you pointed in a semi-sane direction with.
Assuming Alex was any good, which clearly they weren't that good, since they did such a terrible job of explaining all they could offer to the blog post writer. That's partly on Chase, but probably mostly on Alex.
We have a banker and I needed to buy a car recently, I told them my plans and they analyzed various payment options(loan, leasing, paying cash) and gave me a recommendation(just pay cash). When it came time to actually buy the car, the dealer wouldn't take a credit card for the entire cost, so my banker organized a cashiers check so I just walked into the closest local branch, picked up the check and was back at the dealer in 5 minutes(not including travel time).
Sure they can do the whole smooozhy mess as well if you really want that, but we don't, so my banker doesn't do any of those things with me. They know the sorts of charities and things I like, so if the bank ends up sponsoring something in my area, they will let me know and organize tickets or whatever if I wanted. I rarely do those sorts of events, but there are certain ones I like and my banker knows that and just organizes tickets and what not for those events once or twice a year that I like doing.
I have a new startup now and bank with Chase. I will say the banker asked the right questions, understood this was a startup and went into all they could offer. My biggest gripe with Chase that some above said SVB sorted, is the ability to get a credit card in a company name without being tied to personal, at the size we are.
Obviously good relationships with good bankers only happen if you have sufficient assets that financial problems are not usually a lack of assets problem. :) Every bank will be different in the $$ amounts/assets you need to have to get access to the concierge banker pool. Also every bank has a different name for their private/concierge banking.
Generally speaking $1M or more is sort of the minimum amount to have access to the banks good banker people. When you get into the 20-30M range, you can start thinking about sharing a private office with a few other people also in that range, and when you get into 100M or more you can think about starting your own private office, where you hire a full time money person or three to manage it all for you, and they will deal with the concierge bankers. Private/Family offices are sort of concierge banking plus. The Plus is, they will handle your entire family(however you choose to define it), they will teach you and your family whatever you need to know, they will handle budgets, paying bills all that stuff. They will sort out actually purchasing stuff, organizing trips, generally the sky is the limit here.
At BOA, with $100k worth of assets you can get into Platinum Honors which is good banking, but not at the same level as concierge banking. I.e. you don't get access to private banking, but whenever you walk in or make an appt, the BOA person you get will generally do their best to make you happy. Chase has a similar sort of program I believe, but am unfamiliar with it.