Madison entrepreneurs have a great deal to focus on: bootstrapping a minimum viable product, investor reporting, vendor selection and the list goes on. So when selecting a local Madison banking partner, what selection criteria can owners use to make an informed decision?
1. Conceptualize your need
Conceptually understand the types of financial products you need before you begin your research. Do you have physical currency, are you doing payroll in-house and need direct deposit capability, do you need to wire funds, do you need more than one account?
2. Ask for referrals
Ask your trusted advisers for bank referrals before you start Googling. Websites can make promises, 3rd party site reviews are helpful, but nothing beats a personal connection or first hand experience.
3. What can you do for the bank?
Understand the value proposition to your bank partner and look for them to understand theirs. Jobs, Gates and Musk started with nothing and a Bank, like your business, needs to consider long term profitability. $10K in a checking account is good, but each check written and cashed costs a bank money. Many products are an expense to the bank on a per user basis. Be realistic in your value. Conversely, your Bank should understand that someday your company could be its best client. Find common ground.
4. Find the decision maker
When interviewing possible bankers, find someone that has authority to make decisions. There will undoubtedly be unexpected turns in your road to success. You may need a quick turn around on a wire, a letter of reference, something that will require urgency and authority. It’s important that you have a direct relationship with the individual(s) that can make this happen.
5. Do they talk the talk?
During your interview, try to determine how familiar the banker is with startups seeking VC / angel funds, particularly in the Madison and Greater Dane County areas. Do they talk about burn rate, insurance for your investors funds, do they understand preservation of funds by keeping bank transactional costs low? Are they familiar with the paperwork and effort involved in change of ownership?
6. Meet the team
Meet the entire team that will be working with you if possible. Who will be coming out to setup your remote deposit, who is the person that you’ll work with to move funds daily, who is the backup to your primary contact?
7. Get it going
Make your selection and begin the journey. You’ll be surprised how much correspondence and paper work is needed to establish your business. You may be missing critical resolution, you may need to hunt down some answers, but a good banker should help you raise the bar.
About the Author
Justin joined Capitol Bank in 2007 and in addition to his primary role as a Commercial Lender, oversees the Bank’s Commercial Credit Analysts and Portfolio Managers. Prior to joining the Bank, Justin served seven years in the US Army Infantry.