I rushed from bank to bank with my infant daughter when SVB collapsed to figure out how my startup could make payroll on time
Silicon Valley Bank's collapse sent Dispatch Goods cofounder Lindsey Hoell on a race to find alternatives.
Her team and investors navigated the logistical chaos of making sure the company made payroll.
Federal regulators eventually stepped in to protect all SVB depositors.
This as-told-to essay is based on conversations with Lindsey Hoell, who cofounded Dispatch Goods with Maia Tekle, and scrambled with her team to get employees paid on time this week.
Dispatch Goods, a Silicon Valley Bank customer, provides reusable packaging to meal and grocery delivery companies. In the days around the bank's collapse, Hoell's team and investors like Congruent Ventures and Bread & Butter Ventures worked to find ways to quickly pay employees, while trying to get guidance from the Federal Deposit Insurance Corporation, which took over the reins at SVB.
This interview has been edited for length and clarity.
SVB's crash left my startup with $25 in a new checking account on Thursday, March 11
On Thursday morning, I got a ping from one of our investors, and they called me and said, "Hey, there's some trouble with Silicon Valley Bank, if you can move your money out today, you should probably do that."
I immediately contacted our board, and I was like, "Hey, what's going on? How concerned should I be here?"
And what was decided is that it's probably prudent to move some of our funds outside of Silicon Valley Bank, just to be extra sure that we have capital available if something were to happen.
I went into a Wells Fargo branch, and the first appointment I could get in the area was 2 p.m. on Thursday, and I opened a Wells Fargo account. I had to put like $25 into the account in order to open it. And then I was planning on wiring some portion of our money into Wells Fargo.
But by the time I got back from opening that account, the Silicon Valley Bank site was just completely bogged down with other people trying to do the same thing.
Friday morning: Complete panic across the board
I called another friend who was in the same boat. We got up Friday morning and drove down to Silicon Valley Bank's Menlo Park location. And we weren't exactly sure what we're going to do, but we wanted to see if we could get cashier's checks or initiate a wire in person.
We were just pulling up when another person notified us that a security guard had come out and told everyone that the FDIC had taken over the bank, and no one had access to money at that point.
Now we had essentially $25 in the Wells Fargo account, and that was all of the access to capital we had at the time.
We were in a situation where we didn't know what to do, and there's no clarity on what the future is going to look like. It was honestly just complete panic across the board.
My whole Dispatch Goods team rallied to get payroll going
I told our team member who manages the East Coast, "I'm gonna have to overnight you checks to make sure that you can write checks to your team members." And he offered to do it out of his personal account if the checks didn't arrive, to make sure everyone's paid on time.
Everybody else on the team was doing whatever they could to make sure everyone is paid, and even raising their hand to pay personally, which is just so far above and beyond what is expected of employees.
They knew what was going on, and everyone's just like, "Lindsey, you go tackle this, and we'll keep the whole machine running," and they did. They were cheerleading me on.
I had some meetings I was planning on preparing for, and I just handed that over to our head of sales, and he did all the preparation, and just took over what I would have been doing. Our head of processing operations really kept the West Coast moving.
We're not finance people. We're not bankers. We're not venture capitalists. We're just like, regular people working jobs. And SVB supported a lot of climate tech startups.
On Saturday, the day after SVB closed down, I rushed from bank to bank to open an account to pay employees
On Saturday morning, another one of our investors held a conference call with all the founders. This was really helpful, that so many investors were doing this. And founders are really scrappy, so there was a lot of idea sharing about how payroll was going to happen, and what to do.
One of the other founders shared about getting checks printed, and said that some banks will print you checks the same day, or even write them out for you. That was the idea that spurred like, "Okay, the best chance I have of getting money to people by Wednesday, is to go get checks printed at a physical bank."
My husband's driving, and I'm Googling what banks are open, and where we can get into. And then we realized now we're at that time that our daughter Quinn's gonna need another bottle, because she eats like every two to three hours. So we swung back by the house, picked up another bottle, and headed to Daly City.
I couldn't get an online appointment for any of the banks. So I was just going in and basically begging the banks to see me, and there were just long lines. I ended up having to feed Quinn in the car, and I was like, I really need to take a picture of this moment, because this has been some of the craziest days of my life.
I'm in the same boat as a lot of founders, where we actually get to take some time now and decide what we want to do with our banking. I think the one thing that is uniformly appreciated is that we will be diversifying our banks.
—Lindsey Hoell (@Lindsey_Hoell) March 12, 2023
The FDIC has since given all SVB customers full access to their deposits, and Hoell told Insider that Dispatch Goods was finally able to access its account and make payroll on time this week.
Read the original article on Business Insider