How Citizens Bank aims to win over startup founders

Michael Nagle/Bloomberg

In a bid to snap up tech startups and founders left semi-stranded after the 2023 collapse of Silicon Valley Bank, Citizens Bank has launched private banking services for startup leaders.

Eligible early-stage founders gain access to customized private banking services through Citizens for Startups, a subsidiary of Citizens Private Bank that offers "white-glove" banking services.

The offering, launched in May 2025, is "ready for prime time" according to Sam Heshmati, head of emerging venture capital and innovation banking at Citizens Private Bank.

"Citizens Private Bank was established in the summer of 2023 post-bank run," Heshmati said. "Citizens for Startups is a brand new program, and we've spent the better part of the last two years doing a lot of the back-end piping for banking. You have to make sure that the platform actually does work for early-stage companies. We wanted to time it and launch it when we knew we were ready to support the ecosystem at scale."

Heshmati started his career in private banking at Silicon Valley Bank in the early 2000s. He later joined the private bank First Republic, which was acquired by JPMorgan Chase due to failure only a few weeks after the SVB bank run that also triggered the failure of Signature Bank. 

Launching Citizens for Startups under the Citizens Private Bank umbrella brought together Heshmati's previous experiences in both startup and private banking.

Citizens also hired a team of ex-First Republic private bankers in the summer of 2023, shortly before announcing the launch of its wealth management initiatives and Citizens Private Bank.

"A lot of the First Republic people decided not to join JPMorgan," Heshmati said. "Citizens Private Bank is the division that essentially houses this previous group and helps us continue to do the same work in a slightly different way."

That differentiator, according to Heshmati, is bringing the private banking services of First Republic to the startups formerly serviced by Silicon Valley Bank.

"Private banking historically has not been associated with banking startups and early stage founders, and we have a little bit of a different approach in our private bank than many others," he said. "We think that a single point of contact, an individual and a team behind them [a startup founder] in perpetuity, is what allows us to fundamentally understand our clients and lean in and fill blind spots and be more than just a banking partner."

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One of Citizens' startup founder customers, Cameron Hardesty, was a client of SVB until its shutdown. 

"Back when we were with SVB, Poppy was one of many startups — and since we aren't based in Silicon Valley, we often felt like we received more generic, run-of-the-mill treatment," she said.

After the crash she moved her digital wedding floral platform, Poppy, to a large national bank.

"At first, we got very personalized attention," she said. "They were clearly rolling out the red carpet for former SVB clients. But over time, we realized their products and services were either geared toward traditional small businesses or much larger, more established companies."

Hardesty told American Banker that she started looking for a banking partner that understood the needs of venture-backed startup businesses like hers. 

"That's what ultimately led us to Citizens," she said. "We have an incredible team that makes us feel genuinely supported and understood. They truly get the startup ecosystem and the growth path we're on, and they've delivered a level of care and partnership that's been amazing."

For startup founders burned by the SVB bank run, Heshmati pointed to the difference in deposit portfolios as an indicator of long-term stability for founders to look for.

"I ask everyone out there, 'Do your due diligence,'" he said. "Even though SVB and First Republic were comparable in size to Citizens, the deposit composition was materially different."

According to a 2023 Federal Reserve report, 94% of SVB's total deposits were uninsured as of year-end 2022, a few months before the bank run. Similarly, uninsured deposits comprised 68% of First Republic's total deposits as of year-end 2022 according to a FDIC report.

"There's just more flight risk associated with those deposits in a moment of panic," Heshmati said.

Insured deposits comprise 67% of Citizens Bank's total deposits, according to the bank's fourth quarter 2024 earnings report.

"Citizens was largely unaffected during that period of time because the depositors at the bank weren't panicking," he said. "We've been able to demonstrate to the market that we are safe and sound and we can check that box, but we're still small and nimble enough where we can provide a certain experience that maybe some of the larger banks have a tougher time doing."

Heshmati's goal is to build an "end-to-end" private bank experience for startup founders.

"Citizens for Startups is our way of getting and supporting startups at the early stages, and then we have a full platform they can grow into," he said. "Our primary goal is to give back time and money to these founders so that they can focus on what's the most important thing to them, which is building their team, their product and their company."