by - Silicon Valley Bank’s collapse sent Dispatch Goods co-founder Lindsey Hoell scrambling to find alternatives.
- Her team and investors navigated the logistical chaos of making sure the company paid salaries.
- Federal regulators eventually stepped in to protect all SVB depositors.
This narrated essay is based on conversations with Lindsey Hoell, who co-founded Dispatch Goods with Maia Tekleand fought alongside her team to get employees paid on time this week.
Dispatch Goods, a Silicon Valley Bank client, supplies reusable packaging to food and grocery suppliers. In the days surrounding the bank’s collapse, as Hoell’s team and investors such as Congruent Ventures and Bread & Butter Ventures worked to find ways to pay employees quickly, while trying to get guidance from the Federal Deposit Insurance Corporation, which took over the reins of 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 11th
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.”
I immediately contacted our board and I said, “Hey, what’s going on? How concerned should I be here?”
And what was decided is that it probably makes sense to move some of our funds outside of Silicon Valley Bank, just to make extra sure that we have capital available if something were to happen.
I walked into a Wells Fargo branch and the first appointment I could get in the area was at 2pm on Thursday and I opened a Wells Fargo account. I had to deposit $25 into the account to open it. And then I planned to transfer some of our money to Wells Fargo.
But when I came back after opening that account, the Silicon Valley Bank site was just completely bogged down by others 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 the Silicon Valley Bank location in Menlo Park. And we weren’t quite sure what to do, but we wanted to see if we could get cashier’s checks or initiate a transfer in person.
We moved just as another person alerted us that a security guard had come out and told everyone that the FDIC had taken over the bank and that no one had access to any money at that time.
Now we essentially had $25 in the Wells Fargo account, and that was all the access to capital we had at the time.
We were in a situation where we didn’t know what to do, and there is no clarity about what the future will look like. It was honestly just total panic across the board.
My entire Dispatch Goods team rallied to get payroll started
I said to our team member who manages the East Coast, “I need to check checks overnight to make sure you can write checks to your team members.” And he offered to do it from his personal account if the checks didn’t come, to make sure everyone paid on time.
Everyone else on the team did what they could to make sure everyone was paid and even put their hand up to pay in person which is so far above what is expected of staff.
They knew what was going on and everyone said, “Lindsey, you go deal with this and we’ll keep the whole machine going,” and they did. They cheered me on.
I had some meetings I had plans to prepare for and I left it to our sales manager and he did all the prep work and took over what I wanted to do. Our process operations manager really kept the west coast going.
We are not financiers. We are not bankers. We are not venture capitalists. We are just like ordinary people who work. And SVB supported many climate technology startups.
Saturday, the day after SVB shut down, I rushed from bank to bank to open an account to pay employees
On Saturday morning, another of our investors held a conference call with all the founders. This was very helpful that so many investors did this. And entrepreneurs are very miserable, so there was a lot of sharing of ideas about how the salary payment should happen, and what they should do.
One of the other founders shared about getting checks printed, saying that some banks will print checks the same day, or even print them for you. That was the idea that spurred like, “Okay, the best chance I have of getting money to people by Wednesday is to get checks written at a brick-and-mortar bank.”
My husband drives and I google which banks are open and where we can get in. And then we realized that now we’re at the time that our daughter Quinn is going to need another bottle because she’s eating every two to three hours. So we swung back by the house, picked up another bottle and headed to Daly City.
I could not get an online appointment for any of the banks. So I just went in and asked the banks to see me and there were just long lines. I ended up having to feed Quinn in the car and I thought I really need to take a picture of this moment because these have been some of the craziest days of my life.
I am in the same boat as many entrepreneurs, where we actually have to take some time now and decide what we want to do with our bank. I think the one thing that is uniformly valued is that we want to diversify our banks.
—Lindsey Hoell (@Lindsey_Hoell) March 12, 2023
The FDIC has since provided 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.
