Post-SVB Banking Strategy: How to Stop Worrying About FDIC Limits
Written 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, about $175B in deposits, roughly $151B of it uninsured.
- 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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About the author
Harry PrabandhamFounder & CEO
Founder and CEO of StartupCFO. MBA from Wharton, MS in Computer Science, and decades of experience building and advising venture-backed startups.
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