Funny to see this pop up again (I'm the author). The year is now 2025 and I still use Chase as a personal bank and I'm now discovering new funny banking behaviors. I'll use this as a chance to share. :)
My company had an exit, I did well financially. This is not a secret. I'm extremely privileged and thankful for it. But as a result of this, I've used a private bank (or mix) for a number of years to store the vast majority of my financial assets (over 99.99% of all assets, I just did the math). An unfortunate property of private banks is they make it hard to do retail-like banking behaviors: depositing a quick check, pulling cash from an ATM, but ironically most importantly Zelle.
As such, I've kept my Chase personal accounts and use them as my retail bank: there are Chase branches everywhere, its easy to get to an ATM, and they give me easy access to Zelle! I didn't choose Chase specifically, I've just always used Chase for personal banking since I was in high school so I just kept using them for this.
Anyways, I tend to use my Chase account to pay a bunch of bills, just because it's more convenient (Zelle!). I have 3 active home construction projects, plus pay my CC, plus pretty much all other typical expenses (utilities, car payments, insurance, etc.). But I float the money in/out of the account as necessary to cover these. We do accounting of all these expenses at the private bank side, so its all tracked, but it settles within the last 24-48 hours via Chase.
Otherwise, I keep my Chase balance no more than a few thousand dollars.
This really wigs out automated systems at Chase. I get phone calls all the time (like, literally multiple times per week) saying "we noticed a large transfer into your account, we can help!" And I cheekily respond "refresh, it's back to zero!" And they're just confused. To be fair, I've explained the situation in detail to multiple people multiple times but it isn't clicking, so they keep calling me.
I now ignore the phone calls. Hope I don't regret that later lol.
chao- · 1h ago
The fraud story is interesting, but something I had hoped would be addressed by the end of the post, wasn't. You wrote:
>Someone out there is probably mentally screaming at me "you fool!" at this point. With hindsight, I agree...
I was hoping the piece would end with what you would do now (or what should you have done) when Alex called you. Did I fail to understand something in the piece, and simply staying on the phone with Alex would have somehow avoided the fraud situation down the line? It doesn't seem so?
If I were to get such a call, today, my instincts would be to engage in the same "I'm fine" get-off-the-phone-fast actions. What is the alternative?
trillic · 11m ago
I would imagine this phone call's primary goal is trying to sell you higher margin financial products/services.
attentive · 5m ago
What's the point of a private bank or do you mean investement/brokerage?
bigstrat2003 · 1h ago
I read the whole story and I'm still struggling to understand what you did wrong here. You indicated many times "I know, that was a mistake" (or similar phrases), but each time I was baffled because I saw no mistakes. It was your business, and you had every right to move around the funds within your account. What gives anyone at Chase the right to say diddly squat about how you manage your business' finances?
gspencley · 1h ago
I don't think he was trying to imply that he did anything wrong. He was admitting the ignorance regarding how banks and banking work... plus acknowledging that a lot of readers will have had experiences that would make them think "Oh you young fool."
In 2022 I lost my business banking and had to shut down a business that I owned for 20 years because it was related to the adult entertainment industry and, despite being completely legal and aboveboard, a single wire transfer that got a little bit of scrutiny resulted in them asking questions about what we did and, knowing that I was doing absolutely nothing wrong, I answered all of their questions truthfully and completely. A few months later I was told that we "fell outside of their risk appetite", our accounts were being closed... and for two months we searched for any bank or credit union in Canada but none would take us.
A lot of industry insiders had that exact reaction: "Are you stupid? Did you not know?! You NEVER admit that you're in this industry you moron!" etc. We even had a very sympathetic branch manager suggest that we re-incorporate, re-brand and hide what we do (a front, in other words). I couldn't do that. And I mean, we had no issues for 20 years. 10 of which were banking as a corporation (was personal accounts before that since we ran it as a proprietorship) and I thought that being in Canada we were pretty progressive. No one I told on a personal or professional level had ever cared. So why would the banks? We were lawful so why should they care?
conductr · 26m ago
It's not even an indication of fault. It's actually their internal sales/marketing system that flagging these messages. When they notice something like a large deposit, it triggers a message because they want to sell you a new account. Maybe it's savings, a CD, or you're getting ready to buy a house and they can help you with a mortgage. The average teller or even customer service person can't turn off these notifications, although, you may have some ability to opt out of them. Unfortunately, I find opting into useful notifications also opts me into useless ones, so I just ignore the texts...
Your whole arrangement of having an operating account separate from your wealth accounts is highly regular.
Edit - sorry realized I replied to a reply! Put air quotes on You/Your
gwbas1c · 1h ago
TFA didn't really explain the mistake.
What I think it was:
1: Chase's business account wasn't appropriate for a tech startup; nor was it appropriate for the amount of money Mitchell was handling.
2: When your bank calls you after a very, very large money transfer, you should take the call.
That being said: In today's world where every other phone call is some telemarketer trying to scam you or otherwise sell you something you don't want or need, I can sympathize with why Mitchell blew off the first call.
chao- · 46m ago
Your answers are appreciated, but they beg further questions. Do you mind that I inquire further?
>1: Chase's business account wasn't appropriate for a tech startup; nor was it appropriate for the amount of money Mitchell was handling.
What properties make it inappropriate for a tech startup, specifically? What would be appropriate instead, and why?
>2: When your bank calls you after a very, very large money transfer, you should take the call.
He did take the call, but I take your answer to mean that Mitchell and Alex didn't have the right kind of conversation on the call. Is that correct? If so, what ought to occur on a call that follows a large transfer?
bigstrat2003 · 39m ago
> He did take the call, but I take your answer to mean that Mitchell and Alex didn't have the right kind of conversation on the call. Is that correct? If so, what ought to occur on a call that follows a large transfer?
I would echo this question. If my bank called me and asked if I needed help, why would I say yes? I got money, the bank is holding it, everything is going great! This really feels like Alex was trying to ingratiate himself with a big client but communicated that really poorly, such that the message of "you are a big deal so I want to give you top tier service" never came across.
dpkirchner · 31m ago
At what point does it make sense to sign up for private banking? I've been happy with our credit union for day to day stuff but we don't keep a ton of cash around (most of our money is in a brokerage account (ETFs)). Is private banking just for folks that want to have a lot of cash around but not have it in an easy to use account?
0x3f · 28m ago
When you need the specialized services they offer, e.g. Lombard loans, unique mortgage products.
meistertigran · 57m ago
What I took from this is that you have a really engaging writing style. Was interesting to read from start to finish.
welder · 47m ago
You should start a business for your construction projects, then use a business bank like Mercury instead of Chase and get all the nice business features.
JoshTriplett · 1h ago
> I've used a private bank (or mix) for a number of years to store the vast majority of my financial assets
Which one(s)?
hankthecat · 1h ago
This is somewhat funny to read because if you were a JPM(chase) Private Bank client you wouldn't have any of these issues (zelle works, you can deposit checks, pull from any/all ATMs).
CamperBob2 · 28m ago
Or just plain Schwab One. Don't know about Zelle but ATMs and checks work just fine.
(Better than fine, in fact, in that they refund your ATM fees.)
gnerd00 · 1h ago
yeah agree -- it seems like a mistake to use retail banking for real business amounts of money and transactions. I suspect that young adults focused on a fast-moving tech world really did not live the hard lessons of the past with business restrictions. On the one hand, it is a new world now (no one would have come up with the kind of money referenced here, with Mom and Pop business pace); on the other hand, maybe you really are trying to load a trucking worth of transactions onto the top of your used Honda Accord, so to speak.
lotsofpulp · 1h ago
I move $10k+ in and out of BoA/Merrill every week and I’ve never received an alert or phone call. I would have stopped using Chase a long time ago if they were that annoying.
I basically never want to talk to anyone at any bank, like any other utility.
buckle8017 · 1h ago
I'm curious what value you get from the private banking side?
awl130 · 2m ago
I had the same experience at Citibank. We started at a small branch in downtown LA with our Series Seed round check for $3M. Even then we barely got any attention, and dealt with just a local branch manager. Later we closed $7.5M, still no attention; except this time due to consolidation we were kicked to a regional team that handled our account as a team. In fact we never had a dedicated banker, we were just handled like so many SMB by calling a banking center. Over the years we asked for things like corporate credit cards and the like, but it always seemed we were just a little too small (I guess with Fortune 50 clients, we were small to them). Anyway we eventually moved to a smaller independent bank for different reasons.
bdcravens · 1h ago
During COVID, I took a major haircut in my day job, and ended up doing a lot of side work to stay solvent. All my banking was with Chase; I setup a new checking account for my side work. One day they just took about $900. No matter who I spoke to, they bounced me around and never gave me an answer why. I can only guess there was a fraud trigger or something, but to this day, I've never gotten the money back or even gotten an answer as to what happened. I'm fortunate enough in life that $900 isn't a big deal, but at the time, it was HUGE. As a result, I will never, never do business with Chase again (and it would be very convenient, given how many branches I have around me)
gwbas1c · 1h ago
Take them to small claims court.
(Also close the account. No bank should lose money like that.)
righthand · 29m ago
I agree small claims would be an easy win.
holman · 1h ago
Amusing to read this and think back on GitHub's seed round ($100M). At the time we just had a small business account from Bank of America... going from relatively thin cushion in the account over the previous few years to suddenly dropping in $100M was pretty amusing. I believe we moved to a more sophisticated setup quickly thereafter.
recursive · 40m ago
The author imagines that all readers obviously know why his actions were so wrong.
My understanding of banks is much like his naive version. So what's the more enlightened understanding?
I also don't understand banking. "Do you need help?" when I'm making a deposit, or when my investments are set a certain way?
Here's a better idea, guys. Tell me your value proposition. How can I get access to your luxury box? Will you lend me money at ultra-low rates? How about a free toaster? Anything?
heyflyguy · 2h ago
Chase sucks so bad, I would spend a lifetime encouraging anyone to bank elsewhere. I know Mitch is nice enough to say Chase wasn't the problem, but their "controls" are so archaic it makes doing business with them a chore and not a pleasure.
toast0 · 2h ago
I'm not a fan of Chase, and I don't think I'd bank with them again, but they are a 'large national bank'. If you value having local branches mostly where ever you go, they're part of that group. That comes with all the usual exciting attractions like negligible interest on balances, and miscellaneous fees. But if you want a large national bank, eh, I guess they're fine?
My California based credit union doesn't even offer business accounts. And using the co-op network to do in-branch business at other credit unions is not as easy as the marketing lead me to believe, so I had to get a local credit union account where I moved as well. My Washington credit union does do business accounts, so that's a nice option if I need one. Plus, it's fun being a member of two aerospace/defense employee credit unions when I only worked in tech :P
fabiensanglard · 1h ago
Would have been interesting to read what the author would have done differently with what he learned.
You create a startup -> Do you need to do anything special with regard to the bank you chose?
dabeeeenster · 1h ago
Favourite part of this story is how the casually realise there's $1M in funds sent from customers that they didnt notice.
gwbas1c · 1h ago
One of the more frustrating things in life are cleaning up novice mistakes from people who should know better.
I wonder why the investors didn't at least do some due diligence into where the money was being stored?
ajd555 · 1h ago
Great read - as a young startup with Chase, this is an interesting story. As Mitch says, this isn't inherently an issue with Chase, but interesting bank behavior. I'll be sure to keep this story in mind, if we ever get to these amounts of cash!
joelesler · 1h ago
So let's say a startup was funded through a Chase bank account and now everyone on this thread is saying "yeah don't do that"...
Let's say that a friend of mine has a startup funded account at Chase, and where should they go?
greyb · 1h ago
>Let's say that a friend of mine has a startup funded account at Chase, and where should they go?
Silicon Valley Bank... oh wait.
In all seriousness, the approachability and flexibility of SVB bankers was really unparalleled at the time. Not like Alex in this story, that made really half-baked attempts to engage with a client model he was entirely unfamiliar with (but got all the credit for). This being said, Silicon Valley Bank, a division of First Citizens Bank continues to exist.
I see a lot of Fintech players on the scene now. Brex, Mercury and Rho are common ones, through Brex has taken steps to distance itself from true, seed-stage startups as of late. Given what happened with Synapse's failure [1], I have doubts that they have the same protections and regulations of a brick and mortar FDIC bank.
Diversification is key too - so having multiple accounts. Some non-fintech banks I've seen floating around, ironically, JP Morgan Startup Banking, Wells Fargo Technology Banking Group, Citigroup Commercial Bank, PNC Technology Finance. All big banks, just not their retail banking divisions (as the author was experienced using).
What banks are recommended for startups if not chase?
lackbeard · 1h ago
This was a super-interesting read, but I'm disappointed there isn't a description of what, exactly, was wrong about what he did, and what one should do instead. The only thing that comes to mind is the obvious one: you don't want more than the FDIC limit in a single bank account.
bobmcnamara · 2h ago
One man run on the bank!
Giorgi · 1h ago
Would never thought there is so much money to be made in cloud services.
My company had an exit, I did well financially. This is not a secret. I'm extremely privileged and thankful for it. But as a result of this, I've used a private bank (or mix) for a number of years to store the vast majority of my financial assets (over 99.99% of all assets, I just did the math). An unfortunate property of private banks is they make it hard to do retail-like banking behaviors: depositing a quick check, pulling cash from an ATM, but ironically most importantly Zelle.
As such, I've kept my Chase personal accounts and use them as my retail bank: there are Chase branches everywhere, its easy to get to an ATM, and they give me easy access to Zelle! I didn't choose Chase specifically, I've just always used Chase for personal banking since I was in high school so I just kept using them for this.
Anyways, I tend to use my Chase account to pay a bunch of bills, just because it's more convenient (Zelle!). I have 3 active home construction projects, plus pay my CC, plus pretty much all other typical expenses (utilities, car payments, insurance, etc.). But I float the money in/out of the account as necessary to cover these. We do accounting of all these expenses at the private bank side, so its all tracked, but it settles within the last 24-48 hours via Chase.
Otherwise, I keep my Chase balance no more than a few thousand dollars.
This really wigs out automated systems at Chase. I get phone calls all the time (like, literally multiple times per week) saying "we noticed a large transfer into your account, we can help!" And I cheekily respond "refresh, it's back to zero!" And they're just confused. To be fair, I've explained the situation in detail to multiple people multiple times but it isn't clicking, so they keep calling me.
I now ignore the phone calls. Hope I don't regret that later lol.
>Someone out there is probably mentally screaming at me "you fool!" at this point. With hindsight, I agree...
I was hoping the piece would end with what you would do now (or what should you have done) when Alex called you. Did I fail to understand something in the piece, and simply staying on the phone with Alex would have somehow avoided the fraud situation down the line? It doesn't seem so?
If I were to get such a call, today, my instincts would be to engage in the same "I'm fine" get-off-the-phone-fast actions. What is the alternative?
In 2022 I lost my business banking and had to shut down a business that I owned for 20 years because it was related to the adult entertainment industry and, despite being completely legal and aboveboard, a single wire transfer that got a little bit of scrutiny resulted in them asking questions about what we did and, knowing that I was doing absolutely nothing wrong, I answered all of their questions truthfully and completely. A few months later I was told that we "fell outside of their risk appetite", our accounts were being closed... and for two months we searched for any bank or credit union in Canada but none would take us.
A lot of industry insiders had that exact reaction: "Are you stupid? Did you not know?! You NEVER admit that you're in this industry you moron!" etc. We even had a very sympathetic branch manager suggest that we re-incorporate, re-brand and hide what we do (a front, in other words). I couldn't do that. And I mean, we had no issues for 20 years. 10 of which were banking as a corporation (was personal accounts before that since we ran it as a proprietorship) and I thought that being in Canada we were pretty progressive. No one I told on a personal or professional level had ever cared. So why would the banks? We were lawful so why should they care?
Your whole arrangement of having an operating account separate from your wealth accounts is highly regular.
Edit - sorry realized I replied to a reply! Put air quotes on You/Your
What I think it was:
1: Chase's business account wasn't appropriate for a tech startup; nor was it appropriate for the amount of money Mitchell was handling.
2: When your bank calls you after a very, very large money transfer, you should take the call.
That being said: In today's world where every other phone call is some telemarketer trying to scam you or otherwise sell you something you don't want or need, I can sympathize with why Mitchell blew off the first call.
>1: Chase's business account wasn't appropriate for a tech startup; nor was it appropriate for the amount of money Mitchell was handling.
What properties make it inappropriate for a tech startup, specifically? What would be appropriate instead, and why?
>2: When your bank calls you after a very, very large money transfer, you should take the call.
He did take the call, but I take your answer to mean that Mitchell and Alex didn't have the right kind of conversation on the call. Is that correct? If so, what ought to occur on a call that follows a large transfer?
I would echo this question. If my bank called me and asked if I needed help, why would I say yes? I got money, the bank is holding it, everything is going great! This really feels like Alex was trying to ingratiate himself with a big client but communicated that really poorly, such that the message of "you are a big deal so I want to give you top tier service" never came across.
Which one(s)?
(Better than fine, in fact, in that they refund your ATM fees.)
I basically never want to talk to anyone at any bank, like any other utility.
(Also close the account. No bank should lose money like that.)
My understanding of banks is much like his naive version. So what's the more enlightened understanding?
My startup banking story - https://news.ycombinator.com/item?id=35157959 - March 2023 (257 comments)
Here's a better idea, guys. Tell me your value proposition. How can I get access to your luxury box? Will you lend me money at ultra-low rates? How about a free toaster? Anything?
My California based credit union doesn't even offer business accounts. And using the co-op network to do in-branch business at other credit unions is not as easy as the marketing lead me to believe, so I had to get a local credit union account where I moved as well. My Washington credit union does do business accounts, so that's a nice option if I need one. Plus, it's fun being a member of two aerospace/defense employee credit unions when I only worked in tech :P
You create a startup -> Do you need to do anything special with regard to the bank you chose?
I wonder why the investors didn't at least do some due diligence into where the money was being stored?
Let's say that a friend of mine has a startup funded account at Chase, and where should they go?
Silicon Valley Bank... oh wait. In all seriousness, the approachability and flexibility of SVB bankers was really unparalleled at the time. Not like Alex in this story, that made really half-baked attempts to engage with a client model he was entirely unfamiliar with (but got all the credit for). This being said, Silicon Valley Bank, a division of First Citizens Bank continues to exist.
I see a lot of Fintech players on the scene now. Brex, Mercury and Rho are common ones, through Brex has taken steps to distance itself from true, seed-stage startups as of late. Given what happened with Synapse's failure [1], I have doubts that they have the same protections and regulations of a brick and mortar FDIC bank.
Diversification is key too - so having multiple accounts. Some non-fintech banks I've seen floating around, ironically, JP Morgan Startup Banking, Wells Fargo Technology Banking Group, Citigroup Commercial Bank, PNC Technology Finance. All big banks, just not their retail banking divisions (as the author was experienced using).
[1] https://en.wikipedia.org/wiki/Synapse_Financial_Technologies