How Not to Open Bank Accounts

This question keeps coming my way over and over again, so – let’s have a little fun and create a list of the most common mistakes and examples of how not to open bank accounts for FinTech startups.

So, here are some best practices and tried and tested strategies for having your bank account application rejected:

• The name of your legal entity includes words such as “crypto”, “blockchain”, “coin”, “FinTech”, “investments” or any combination thereof (even though during the first year after incorporation you will likely be just developing a technical prototype, building your team and fundraising, you still want to stand out and announce your long-term aspirational goals, and you find names such as “IT Services Limited” or “Software Consulting”  or “ABCD Inc” quite boring and uninspiring).
• Your Trade Register (Commercial Register, Business Registration file, etc) information or Articles of Incorporation say that your corporate mission and core activities include disrupting old-fashioned banking systems and revolutionizing investments space (since you feel that saying that you will be active in software development and business services is not so impressive).
• Your Trade Register information is not consistent with your website information (for example, the commercial register states that you are active in the IT services, but your website invites people to sign up for beta-testing of the “new age next-generation banking”.
• You declare in your banking application that 10% of your future revenues will be donated to the charity organization that you will eventually create or to the political movement that you are planning to organize in the future.
• Your project to earn and bring to the bank huge revenues during the next 12 months, but unable to provide any signed memorandum of understanding or partnership contract with a credible partner or client.
• When asked to provide some evidence of your financial history, you produce a credit card statement that shows payments to gambling and adult services and penalties for late payments during the previous months.

Yes, I know it’s not really funny and often feels unfair, but the best advice I can offer is this: when you are a newly created entity and you don’t have any real clients or financial activities just yet, your business should look simple, small and boring. Once you have an account, you will start building your business and your banking relationship from there.

Hope it helps!