- The collapse of the Silicon Valley Bank sent Dispatch Goods co-founder Lindsey Hoell into a race to find alternatives.
- Her team and investors navigated the logistical chaos to ensure the company made payroll.
- Federal regulators eventually stepped in to protect all SVB depositors.
This as-told-to essay is based on conversations with Lindsey Hoell, who co-founded Dispatch Goods with Maya Tekleand scrambled with her team to get employees paid on time this week.
Dispatch Goods, a client of Silicon Valley Bank, supplies reusable packaging to food 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 were tried to find ways to pay employees quickly while seeking guidance from the Federal Deposit Insurance Corporation, which took over the reins at SVB.
This interview has been edited for length and clarity.
The SVB crash left my startup with $25 in a new checking account on Thursday, March 11
On 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 transfer your money today, you probably should.”
I immediately contacted our board and thought, “Hey, what’s going on? How concerned should I be?”
And what was decided is that it’s probably prudent to move some of our money outside of Silicon Valley Bank, just to be extra sure that we have capital available if something were to happen.
I went to a Wells Fargo branch and the first appointment I could get in the area was Thursday at 2pm, and I opened a Wells Fargo account. I had to put $25 into the account to open it. And then I planned to transfer some of our money to Wells Fargo.
But by the time I came back from opening that account, the Silicon Valley Bank site was just completely bogged down with other people 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 to the Menlo Park location of Silicon Valley Bank. And we weren’t quite sure what we were going to do, but we wanted to see if we could get cashier’s checks or start a wire transfer in person.
We were just about to pull over when another person told 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 the 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’s no clarity on what the future is going to look like. It was honestly just complete panic across the board.
My entire Dispatch Goods team rallied to get payroll up and running
I told our team member who manages the East Coast, “I need to check your checks overnight to make sure you can write checks to your team members.” And he offered to take it out of his personal account if the checks didn’t come, to make sure everyone got paid on time.
Everyone else on the team did what they could to make sure everyone got paid, even raising their hands to pay in person, which goes way beyond what is expected of employees.
They knew what was going on, and everyone just said, “Lindsey, you’re going to handle this, and we’re going to keep the whole machine running,” and they did. They were encouraging me.
I had some meetings that I planned to prepare, and I just turned that over to our head of sales, and he did all the prep and just took over what I would have done. Our head of processing operations really kept the west coast moving.
We are not financial people. We are not bankers. We are not venture capitalists. We are just like regular people who have jobs. And SVB supported many start-ups in the field of climate technology.
On Saturday, the day after the SVB closed, 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 founders are really sloppy, so there was a lot of sharing about how payroll would happen and what to do.
One of the other founders shared about having checks printed and said that some banks will print or even write checks for you the same day. That was the idea that spurred like, “Okay, the best chance I have of getting people money by Wednesday is to have checks printed at a physical bank.”
My husband drives, and I’m googling which banks are open and where we can get in. And then we realized that now that we are at that time, our daughter Quinn is going to need another bottle because she eats every two to three hours. So we went back to the house, grabbed another bottle and headed for Daly City.
I couldn’t get an online appointment for any of the banks. So I just went in and begged the banks to see me, and there were just long lines. I ended up having to feed Quinn in the car, and I was like, I really need to get a picture of this moment, because these have been some of the craziest days of my life.
I’m in the same boat as many founders where we can really take some time now to decide what we want to do with our banking. I think the one thing that’s uniformly valued is we’ll diversify our banks.
—Lindsey Hoell (@Lindsey_Hoell) March 12, 2023
The FDIC has now given all SVB customers full access to their deposits, and Hoell told Insider that Dispatch Goods was finally able to access its account and do payroll on time this week.