The Mind 🧠 of a CFO

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This is a special edition issue of The Mind 🧠 of a CFO due to the failure of Silicon Valley Bank (“SVB”) on Friday, March 10. SVB was the 16th-largest bank in the US.

The failure is the second-largest bank failure in US history, essentially caused by a run on the bank. There is plenty of coverage on what caused the failure, so we want to focus on what to do now and in the future.

1. Do not panic. Panicked depositors are what caused SVB to fail

2. Customers of SVB with over $250k need to contact the FDIC. Click here for more information from the FDIC. Also, check out Pilot’s guide by clicking here. There is a lot more a customer of SVB needs to do. However, none of our clients were directly impacted, so we will leave the rest up to other advisers. UPDATE: The FDIC announced that uninsured depositors will be protected.

3. Determine if any of your vendors were impacted by the failure. The following are a few we are aware of that were impacted.

   • BILL - had over 11% of total cash at SVB, including customers’ money. They are committed to ensuring all pending transactions with SVB process successfully

   • Etsy - email to customers stating delayed payments

   • Melio - SVB is one of several providers. Routed all new transactions. Making sure all pending transactions with SVB process successfully

   • Patriot - used SVB 100%. It temporarily prevented approximately 8.1k customers from processing payroll. They are working on getting everyone paid that was not paid on Friday and replacing SVB.

   • Rippling - working on getting everyone paid that was not. Moved to JP Morgan Chase.

   • Shopify - minor impact. SVB was 1 of the 12 banks they used.

   • A colleague published this amazing Bank Collapse App Info after I published this issue.

4. Non-SVB customers, confirm your bank is FDIC insured by checking your bank’s website or clicking here.

   Note: Some online banks use a third-party banking partner, so you need to know the banking partner to look up if they are insured by the FDIC.

5. Do one or both of the following for funds over $250k not insured by the FDIC. The FDIC insures $250k per depositor per insured bank for each account ownership category; click here to learn more

   • Open a second bank account. We recommend clients hold a 2-3 month cash reserve and taxes at a separate bank to make funds harder to access.

     Our go-to bank for a2 advisers is Relay (we make a few peanuts with this link). It only takes a few minutes to apply for a Relay account, and they are offering extended FDIC insurance for depositors above $250k.

   • Talk to your current bank about ways to ensure the FDIC insures all your funds. Some banks will offer services like Insured Cash Sweeps or Certificate of Deposit Account Registry Services.

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Thanks for reading, Luke Templin!

P.S. There are two ways to work with Luke to grow your business profitably.

1. Virtual CFO Cohort for service-based entrepreneurs with $250k - $1 million revenue.

2. Fractional CFO for service-based entrepreneurs with over $1M in revenue.