by - The collapse of Silicon Valley Bank sent Dispatch Goods co-founder Lindsey Hoell scrambling to find alternatives.
- Her team and investors overcame the logistical chaos to ensure the company made payroll.
- Federal regulators eventually stepped in to protect all SVB depositors.
This essay is based on conversations with Lindsey Hoell, who founded Dispatch Goods with Maia Tekleand scrambled with her team to find employees are paid on time this week.
Dispatch Goods, a client of Silicon Valley Bank, provides reusable packaging to meal and grocery delivery companies. In the days surrounding the bank’s collapse, Hoell’s team and investors such as Congruent Ventures and Bread & Butter Ventures he 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 collapse left my startup with $25 in new checking account Thursday March 11
On Thursday morning, I got a ping from one of our investors, and they called me and said, “Hey, there’s a problem with Silicon Valley Bank, if you can move your money today, you probably should. “
I immediately contacted our board and said, “Hey, what’s going on? How worried should I be here?”
And what’s been decided is that it’s probably wise to move some of our funds out of Silicon Valley Bank, just to be more sure that we have funds available if something happens.
I went to a Wells Fargo branch and the first appointment I could make in the area was at 2pm on a Thursday and I opened a Wells Fargo account. I had to put about $25 into the account to open it. And then I planned to put some of our money into Wells Fargo.
But by the time I got back from opening that account, Silicon Valley Bank’s website was completely jammed with other people trying to do the same thing.
Friday morning: Panic panic
I called another friend who was in the same boat. We got up Friday morning and headed down to Silicon Valley Bank’s Menlo Park location. And we weren’t exactly sure what we were going to do, but we wanted to see if we could get cashier’s checks or start a cable 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.
We now had essentially $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. Honestly it was just absolute panic on all levels.
My entire Dispatch Goods team got together to start payroll
I said to our team member who manages the East Coast, “I’m going to have to run checks 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 arrive, to make sure everyone got paid on time.
Everyone else on the team went out of their way to make sure everyone got paid and even raised their hand to pay personally which is so much above and beyond what is expected of employees.
They knew what was going on, and they all said, “Lindsey, go deal with it, and we’ll keep the whole machine running,” and they did. They were cheering me on.
I had some meetings that I planned to prepare for, and I just handed them over to our sales manager, and he did all the preparation and just took over what I was going to do. Our head of editing really kept the West Coast moving.
We are not financial people. We are not bankers. We are not venture capitalists. We are just like normal people working jobs. And SVB has backed many climate technology startups.
On Saturday, the day after SVB closed, I ran from bank to bank to open an account to pay the employees
On Saturday morning, another of our investors held a conference call with all the founders. That was really helpful, that so many investors were doing that. And the founders are really useless, so they shared a lot of ideas about how payroll would be done and what to do.
One of the other founders shared about check printing and said that some banks will print checks for you the same day or even write them for you. That was the idea that sparked, “Okay, the best chance I have of getting people money by Wednesday, is to go print checks at a physical bank.”
My husband drives and I google which banks are open and where we can get in. And then we realized that we are now at that time that our daughter Quinn is going to need another bottle because she is eating every two to three hours. So we went back to the house, got another bottle and headed to Daly City.
I was unable to make an online appointment for any of the banks. So I was just going in and begging the banks to see me, and there were just long lines. I ended up having to feed Quinn in the car, and I really wanted to get a picture of that moment, because those were some of the craziest days of my life.
I’m in the same boat as a lot of founders where we can actually take some time now and decide what we want to do with our banking. I think the only thing that is evenly valued is that we will diversify our banks.
—Lindsey Hoell (@Lindsey_Hoell) March 12, 2023
The FDIC has since given all of SVB’s customers full access to their deposits, and Hoell told Insider that Dispatch Goods was finally able to access their account and make payroll on time this week.
