Grasshopper Bank, a New York City-based digital bank geared toward startups, is focusing on pain points for founders, who usually have a heightened awareness of user experiences.

According to Jeremy Shure, who was appointed global head of Grasshopper’s early-stage practice last month, the banking industry hasn’t adequately met the needs of founders. Shure, who previously was a managing director at Silicon Valley Bank, spoke to Bank Innovation about his approach to running Grasshopper’s early-stage practice.

Why does the industry need an institution like Grasshopper?
My entire career has been focused on being in service of founders. New York is certainly one of the most exciting tech hubs in the world, and I did not understand how it did not have a tech bank headquartered in its backyard.

Banking, historically, has been painful for founders. [We] are very much focused on creating a platform that is frictionless for founder, meeting expectations around the user experience. We’re actually in the market working with founders to help create what we see as the bank of the future.

I want to add a third point about access. Because of the technology that we’ve created at Grasshopper, we are not just [offering] banking services but a partnership [approach] to founders that is agnostic of their background, where they went to school or what accelerator program they may have been in.

What are the problems with the banking experience for founders today?
The technology that banks are providing to founders is so archaic that founders themselves are more often than not frustrated with their banking experience. Working with a banking partner should be frictionless. Founders don’t have time to send emails back and forth to open up a bank account. 

What about the current wave of digital-only banks cropping up? Do you draw inspiration from them?
I am excited about any sort of innovation in the banking space. What’s interesting to me, and one of the reasons I joined Grasshopper, is it is the only one that that has received a charter [from the Office of the Comptroller of the Currency in April]. What that means is that we aren’t on the rails of another bank, subject to another bank’s processes.

What do you view as the role of Grasshopper’s early-stage practice?
We want to ensure that we are able to provide the services that founders need at the right time. When we go out for a full public launch [later this year], we want to be positioned to help any early-stage company. We don’t want to pattern match.

What do you mean by pattern matching?
Pattern matching is seeing one client as more important than another if, for example, they worked at Google and went to Stanford. We are aligned with funds, accelerators and constituents who care deeply about breaking the cycle [of unequal access to resources]. It’s important for us to let founders and those [emerging tech] ecosystems know we’ve got them covered. People talk about a ‘friends and family’ [funding] round, but we don’t at Grasshopper because ‘friends and family’ round by name implies privilege.

You note that, in addition to traditional banking services, Grasshopper will be providing microloans to founders. How does this work and why is this needed?
Grasshopper will take on an early-stage company that may not yet have an institutional investor. The goal for a lot of these companies is to get institutional investors but, in order to do that, they actually need [funding] to be able to hire, execute and create a minimum viable product.

If [startups] are asking for $100,000 or $200,000 in loans where banks typically won’t play, we look at that as an opportunity to help founders hit that next inflection point. We have kind of flipped the model on its head. If we can support founders getting to the [funding] round and getting to their Series A through a smaller slug of debt, then that truly is a way to support the founder.