Banks cut sweetheart deals with large depositors to keep their deposits with them. A sweep account is less lucrative than one you can YOLO into long-term Treasuries. I'm not surprised most start-ups didn't have a treasurer; I am surprised e.g. Roku or Circle didn't.
Most depositor networks demand reciprocity for their members, so a dollar that leaves the bank in a sweep comes back from some other bank. They are technically more expensive than a large depositor that wanders in off the street in that the network takes a bit but from a total customer acquisition cost it really depends on the bank.
For some banks brokered deposits subsidize all other deposits because their customers otherwise are more expensive. Many small banks that serve underprivileged communities are in this category.
For SVB it seems this was decidedly not true! They had low cost to acquire large depositors and had no market pressure to engage with a deposits network.
Banks cut sweetheart deals with large depositors to keep their deposits with them. A sweep account is less lucrative than one you can YOLO into long-term Treasuries. I'm not surprised most start-ups didn't have a treasurer; I am surprised e.g. Roku or Circle didn't.