Startup Accounting
Post-SVB Banking Strategy: How to Stop Worrying About FDIC Limits
Collated by Harry Prabandham
Curated by Rubric Financial
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What SVB's Collapse Actually Taught Us
- March 2023: SVB went into FDIC receivership. Customer deposits above the $250K FDIC limit were frozen for ~48 hours until the FDIC announced full backstop.
- Many startups had 100% of their cash at SVB — payroll couldn't be made, vendor payments missed, ~$340B in deposits at risk.
- Lesson 1: a single point of failure in your banking can destroy your runway overnight.
- Lesson 2: FDIC limits ($250K per depositor per bank per ownership category) are NOT just a theoretical concern.
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