Where Should I Bank My Start-Up?

I had a quick chat with a Durham-based entrepreneur in our office this morning.  I'm not sure how we got to the topic of banking, but he mentioned that he had an account with SunTrust or Bank of America or some other "normal" bank.

I immediately suggested that he contact Zack Mansfield at Square 1 Bank - which is where we bank at Argyle - or contact someone at Silicon Valley Bank.  Many entrepreneurs don't know about these banks - but they specialize in financial services for start-ups and venture capital.

I made the suggestion for a few reasons:

  • These banks understand the process of starting and building a company.  And they understand the financing challenges entrepreneurs face along the journey.  So instead of working with a banker whose other customers are "traditional" businesses, you'll work with a banker whose other customers are guys just like you.
  • Because of the focus on entrepreneurs, these banks provide great networking opportunities.  Square 1 hosts a monthly event called NC Spark for the CXOs of it's Durham-based clients - always great conversations and beers.  The folks at Square 1 and SVB have both introduced me to prospective investors.  Zack at Square 1 recently made an introduction to an employee that we hired a week after the email introduction.
  • The advisory services we've gotten from Square 1 have been great.  Can't imagine that a relationship banker at SunTrust would be able to help me think through fundraising complexities and growth challenges we've encountered over the past year or so.  Adam Smith - Zack's predecessor, now at StatSheet - was particularly helpful in this regard.

So there you go.  Don't bank your start-up at the local BB&T.