Startups require more than a bank

The morning of March 10, 2023, wasn’t just a market event for startup founders. It was a personal crisis. As news of Silicon Valley Bank’s collapse spread, my phone lit up, not just with panic over deposit security, but with a more profound, strategic dread. The questions were all variations on a theme: “Are our deposits safe?” was quickly followed by “Who will underwrite our credit line now?” “How do we make payroll next week?” and “Who’s going to make our next investor intro?”

This wasn't irrational fear. It was the sudden realization that their most critical financial partner had vanished overnight. For decades, SVB wasn’t just a bank; it was the foundational plumbing of Silicon Valley itself.

The startup banker, advisor, and matchmaker

SVB’s genius was its deep specialization in the unique, often counterintuitive, needs of a startup.

Unlike traditional banks that looked backward at profit and loss statements, SVB looked forward. They underwrote based on a startup’s burn rate, runway, cap table, and the credibility of its investors. They didn’t just hold your money; they understood your business model, often better than you did. They were a confidant you could call to ask, “Should we extend our runway?” or “Is this a normal burn rate for our stage?”

SVB’s rolodex was its secret sauce. A warm introduction to a Series A investor, a key engineering hire, or a potential acquirer was often a phone call away. They actively connected the dots within their ecosystem, acting as a growth catalyst far beyond providing capital.

It was more than transactions. It was the industry events, the founder networks, the “Silicon Valley watercooler” where deals and ideas were sparked. They built a tribe, and banking was the price of admission.

SVB worked because its model was built on belief

SVB’s model was radical when it began 40 years ago. Their thesis was simple: bank the startups while they’re nobodies, so you can grow with the unicorns. They solved fundamental pains: providing corporate cards without personal guarantees (a massive hurdle at the time) and creating the venture debt product to minimize equity dilution. They invested fully in the entrepreneur, not just the business. This deep, holistic support system is what we lost in 2023, and it’s what founders have been scrambling to replace ever since.

The SVB aftermath: A fragmented, unsatisfying landscape

The initial scramble in the wake of SVB’s collapse was for safety. But once the dust settled, a more insidious problem set in: fragmentation. Startups found themselves playing the role of a systems integrator, cobbling together a patchwork of solutions that, while functional on their own, failed to re-create the cohesive support they’d lost.

Most current startup options fall short

Startups were asked to make tradeoffs between the rigidity of big banks, the narrow focus of neobanks, and the inefficiencies of a DIY finance stack.

Many flocked to names like JPMorgan Chase for their perceived security and stability. But founders quickly discovered a maze of red tape, rigid underwriting that can’t comprehend a startup’s burn rate, and a one-size-fits-all platform that feels anything but easy. These institutions offer security, but at the cost of agility and understanding.

Platforms like Mercury arrived with brilliant UX and a digital-first promise that resonated. And for basic banking, they’re a great solution. But the gap becomes clear when you need more, like a credit line, strategic advice, or a warm introduction. They provide the tools, but not the partnership.

This is the reality for most savvy startups today: a Frankenstein’s monster of best-in-class tools. Mercury for access to checking, Brex for cards, Tipalti for AP, Pilot for bookkeeping, and a dozen other point solutions. It’s a testament to founder ingenuity, but it’s not a startup growth strategy.

The hidden costs of a patchwork system

This fragmentation creates a silent tax on innovation that extends far beyond monthly subscription fees.

It can take an operational toll. Founders and their finance teams now spend hours each week manually reconciling data across disconnected platforms, chasing down receipts, and building custom workflows for their unique businesses. This time is stolen from product development, customer growth, and strategic thinking.

But the most significant loss is a single trusted voice on the other end of the phone. There’s no one to call for nuanced advice anymore. “Should we use debt to extend our runway before our Series B?” “What are other SaaS companies in our stage seeing on CAC?” With a DIY stack, there’s no one place to get answers, and this lack of strategic guidance is a massive, unquantified risk.

It can also lead to the loss of opportunities. The network effect has vanished. The serendipitous introductions, the community events that felt like a must-attend — these soft assets were often the catalyst for hard growth. Without a central hub, founders can feel isolated, like they are operating in a vacuum.

This is the real gap. It’s not a lack of banking options, but a lack of a true financial partner that combines operational ease with strategic depth.

What startups miss most, and what they need now

So, what does this void actually feel like on the ground? It’s less about a specific product and more about a loss of confidence and cohesion. Startups aren’t just looking for a new bank; they’re looking for a replacement for a key partner. In our conversations at Rooled with dozens of founders and CFOs navigating this new reality, three core themes emerge.

1. "I don't know who to trust with my finances now."

For many, the loss of SVB was the loss of a confidant. One founder put it perfectly: “It wasn't just that they had our money; it was that they got us. They were a sanity check.” Startups crave the peace of mind that comes from a partner who understands their unique journey and can be a steady hand through uncertainty.

2. "I spend hours juggling banking, cards, and forecasting tools."

This is the daily operational frustration. Another client shared, “I'm a founder, not a bookkeeper. But now I'm spending my afternoon manually moving data from Mercury into a spreadsheet to understand our cash flow. It's a massive distraction and time suck.” The cognitive load of managing a dozen logins across and ensuring data syncs correctly within accounting software for startups is a real tax on productivity and a primary source of burnout for early-stage teams.

3. "No one fills the 'community' gap. We feel isolated."

The proverbial watercooler is gone. The loss of SVB’s networking ecosystem is a subtle but significant blow. Founders tell us they miss the curated introductions and the events that felt more like a family reunion than a conference. This ecosystem was a powerful engine for growth and support, and its absence has left many feeling like they’re building in a silo.

The deeper need for startups? A partner from day one

This brings us back to the core of SVB’s original thesis, which is more relevant now than ever. The market need isn’t for another bank that only wants to serve you once you're profitable at Series A. The need is for a partner that believes in the entrepreneur from the first dollar of venture funding and provides the integrated financial tools, strategic advice, and network access to help them become that Series A success story. That’s the gap that truly needs filling.

How I’ve witnessed Brex stepping in (and raising the bar)

What’s been fascinating to observe since 2023 isn’t just a scramble for alternatives, but the emergence of a new, more integrated standard. From my vantage point, Brex hasn’t just begun to move into SVB’s old office; they’ve blueprinted a modern financial operating system designed for today’s startup reality.

Beyond banking: Finance that scales with your business

The most direct answer to the fragmentation problem is integration. Brex combines the core necessities — access to checking, high-yield† treasury management, FDIC-covered vault accounts, bill pay, expense management, and powerful corporate cards — into a single, seamless experience. With Brex, you can forget the multiple logins and disjointed approach to startup finance.

But it’s Brex’s startup-first DNA that makes the difference. Brex reimagined the corporate card underwriting process for startups, focusing on real-time financial data to assess projected growth and using metrics like cash balance or revenue instead of traditional credit scores. And they’ve modernized it: the process is faster, fully digital, and designed to scale with you from day one. Features like earning yield on your first dollar with no minimum requirements and protecting up to $6M with FDIC insurance coverage spread across partner banks aren’t just perks. They’re fundamental to extending a startup’s runway, managing cash flow, and providing crucial stability.

The new matchmaker: Rebuilding the network, digitally

Perhaps the most ambitious and necessary step is Brex’s investment in community. Brex isn’t just replicating the old, analog network. They’re building a new one for a distributed, global era. Through targeted events and dinners, powerful founder communities, and programs designed to facilitate investor intros and AI moments, Brex is actively filling this “isolation” gap. It’s real connection, reimagined for a world where the next great company can be built anywhere.

And of course, the strategic layer

This is where I see the true evolution happening. A powerful platform is essential, but it’s not the entire solution. This is the lesson from 2023: you need both powerful tools and powerful governance.

This is the role we play at Rooled. We help startups become “Brex-ready” and maximize the value of the platform. We provide strategic financial guidance, serving as trusted advisors for questions on burn rate, runway, and startup fundraising strategy. We implement the controls and audits to ensure clean books and smart spend, which in turn helps startups qualify for and manage higher credit limits on Brex cards, for example.

The future: One finance partner that grows with you

The collapse of Silicon Valley Bank was a traumatic event, but it was also a forced modernization. It revealed that the old model, while revolutionary for its time, had to evolve beyond its limitations. The future of startup finance centers on building something more resilient, integrated, and intelligent.

Startups shouldn’t have to settle. They shouldn’t have to choose between speed and control, between a powerful platform and a trusted advisor, between a bank and a community. The bar has been raised, and the market is responding.

Today’s founders deserve a financial partner that provides all three:

1. An intelligent finance platform that combines startup banking, smart corporate cards, spend management, and yield-generating treasury to eliminate operational drag and provide a single source of financial truth.
2. Access to real strategic guidance, whether from the platform itself or from expert partners, that helps you make smarter decisions and extend your runway.
3. A built-in network that fosters connections, facilitates introductions, and ensures you’re building alongside your peers, not in isolation.

Brex isn’t just filling a gap by providing smart cash management for startups. By building a comprehensive and intelligent financial OS and actively fostering its ecosystem, it’s constructing the next era of startup finance — one that’s more accessible, efficient, and resilient than what came before.

For founders, the message is simple: you can have it all. Brex is the partner you need to build from your first dollar to your last.

David Johnson is Director of Rooled. His unique journey began in Big Four accounting before a decade managing rock bands. He returned to finance, founding tempCFO, an early outsourced accounting firm that advised 4,000+ companies. After its sale, he now leads the exceptional team at Rooled, providing best-in-class outsourced accounting, tax, and financial advisory services to entrepreneurs. When not advising founders and CEOs, he can be found skiing fresh powder wherever it falls.

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