What this startup CEO learned from the SVB collapse

Two days after Silicon Valley Bank collapsed, Hannah Olson, co-founder and CEO of Disclo —  a tech platform that manages employee disability disclosures and had banked with the financial institution — did the only thing she could think of. She roasted two chickens. 

"That's my way to [calm down], and I was planning for the fact that I'd have a really busy week ahead of me," Olson says. "Because, you know, I'm going to have to eat this week."

Disclo, which launched in July of 2022, helps employers manage disability accommodations for employees while maintaining HIPAA and ADA compliance. The company recently closed a $5 million seed round of funding, creating a nice runway for the growing operation. But on March 10, as news of SVB's collapse spread, that runway suddenly seemed dangerously short. 

For Olson, the next 72 hours were dedicated to keeping calm and providing transparent communications to her team of seven employees and Disclo's network of stakeholders. 

Read more: Silicon Valley Bank collapse highlights the importance of an internal communications strategy

"We ran through all the scenarios: If we were to lose everything and only have [the FDIC-guaranteed] $250,000 left, what are we going to do and how are we going to lengthen our runway," Olson says. Of course, on Sunday evening, the U.S. government announced that all SVB depositors would have access to all of their funds by the following morning. 

The announcement brought relief — and valuable lessons. Olson, who's now working to diversify her company's assets, recently spoke to EBN about her thought process over that emotionally-long weekend, how she created stability for her employees, and why she's taking a different approach to banking moving forward. 

What was happening leading up to the collapse, when did alarm bells really start going off for you? 
We started hearing things through Twitter on Thursday evening, after bank hours and when wires were already closed, And then of course we inevitably experienced a huge amount of fear over a 72-hour period, worrying about a rapidly-shortened runway. But Friday morning is when we started to really have an action plan, and spent time coming up with internal communications and documenting everything. And then we notified everyone on Friday afternoon. 

Read more: Don't wait for the next bank crisis to protect your payroll

I really didn't want our team to find out on the news — I wanted them to hear it directly from our mouths. So we hosted an all-hands meeting to transparently tell our employees what the situation was and what the plan was, and we also wrote an email to all of our stakeholders, updating them on exactly how much we banked with SVB, what our plan was in the interim, and that we were trying to stay calm. 

When you were prepping to have just $250,000 in assets, what did those action plans look like? 
We needed an all-hands-on-deck focus on sales, and continue to bring on customers because that would be our main source of revenue. So we were thinking about who could help us rip that Band Aid off and help with sales, and we were also thinking about where we could cut unnecessary costs, or things that were nice to have. It was about surviving for the next two months. 

Other than your own team, did you reach out to a network of mentors or advisers for guidance? 
We're lucky to have a huge group of supporters, both inventors and advisers, and we were in close contact with several of them throughout the weekend. But at that point, no one really knew what to do, right? So the advice was: Go through the claims process, and keep going as if you're not getting your money back. We got on the phone with the FDIC, and were on hold for a long time, but we were really persistent about figuring out what our options were, and we were able to file a claim on Saturday. And then Sunday was when we got the good news that we would be getting some relief. 

Read more: With Disclo, disability disclosure and HR compliance get a tech-driven makeover

Must have been a weight off, to say the least. 
When I had the chance to sit back last week, I documented everything that had happened in that 72-hour period, because there are a lot of learnings to gain when you're reacting in real time and trying to stay calm. I wrote down exactly what we said, how we said it, what we thought about, and what were the potential scenarios. It was a good exercise, but it also showed me how quickly this all happened. I think a lot of founders feel, I don't want to say invincible, but when you get funded you're on this high and feel like you've got this figured out. When that gets taken away from you, it causes you to think about how you can adapt and be more efficient with spending and in your sales strategy as well. 

How will this change the way you grow Disclo moving forward? 
You know, we had a great relationship with SVB and were really close with the people that we banked with there; they've always been founder-friendly. But we've since opened two new bank accounts, relying on tier-one banks, and we're in the process of diversifying our cash holdings.

We're open to exploring what we do with our money. Down the line, I think we'll probably be exploring money market accounts and these kinds of things. But right now is about getting our feet on the ground. Being in a startup is already a risky venture in and of itself, and for us, we think that banking should be the least risky thing about a business.