Judith Erwin built a bank to give founders their time back

Judith Erwin had a wonderfully inconvenient question for banking: why should buying shampoo at midnight be easier than applying for a business loan? The customer, presumably, was the same person. The internet had not closed. Only the institution seemed to have retired for the evening. After more than three decades in the business, she wanted commercial banking to catch up with the lives being lived around it.

Grasshopper was her answer. As its co-founder and founding chief executive, Erwin set out to build a digital bank for entrepreneurs and the investors who financed them. The ambition had a practical scale: fewer errands, less paperwork, more useful information. A founder might be inventing the future, but there was still an account to open before lunch.

A branch job, then a taste for building

Her own banking career began in 1982, with a job in a branch during a recession. She started low in the hierarchy and took opportunities as they appeared. It is an unglamorous beginning for a technology-bank story, which is precisely its charm. Before software became the proposed remedy, she had spent years inside the machinery.

Her career included Imperial Bank, Comerica and Plaza Bank of Commerce. In 2005, she joined the founding executive team at Square 1 Bank, taking responsibility for venture capital services globally. That put her alongside a particular kind of customer: people whose businesses were being assembled while their financing, staffing and ambitions were still changing shape.

Square 1 went public in 2014 and was sold to Pacific Western in 2015. Erwin had helped take a bank from its beginning through an initial public offering and a sale. An exit is supposed to provide a pleasing full stop. For her, another opening eventually followed.

In early 2016, she was approached about starting a venture bank in New York. Her condition: a different technology strategy. Experience had made her specific. There was little appeal in recreating familiar inconveniences beneath a fresh coat of paint; the next institution needed a different foundation.

Before the opening bell, Orange Day

A photograph from May 2018 offers a pleasingly ordinary glimpse of the undertaking. Erwin stands with former chief information officer Linda Orlando and technical writing consultant Karen Rempel, celebrating Orange Day. A bank was being prepared for opening. There was also, evidently, room for a dress code with a sense of humour.

The work surrounding that moment was less photogenic. Rempel developed more than 50 standard operating procedures and worked through the bank’s daily and monthly processes. Deposits, loans, reporting and oversight all needed to function when customers arrived. A new bank requires an extraordinary amount of preparation before it can perform an apparently ordinary task.

That detail matters to Erwin’s story. An easier customer experience still needs people who understand what happens behind the screen. The preparation brought operations, risk, finance and software specialists into the same undertaking. Convenience was something a team had to build, document and make dependable.

$131.2 million, and permission to begin

Grasshopper opened on May 13, 2019, initially serving a selected group of entrepreneurs and venture investors. Its capital came in two stages: a $15 million seed round and approximately $116.2 million in a private placement. Together, the announced figures amounted to $131.2 million.

The founding team paired banking experience with technology experience. Co-founder and chief technology officer Minerva Tantoco had been New York City’s first CTO. Chief financial officer Sangeeta Kishore came from Metropolitan Commercial Bank. Erwin brought her years working with venture capital clients. The bank’s proposition required those disciplines to meet.

Choosing a banking charter also shaped the business. Grasshopper could gather deposits and make loans itself. The model gave it interest income alongside potential fee income, rather than depending solely on card spending or small account charges. For a bank aimed at companies with changing needs, that range was part of the point.

The charter application went in during October 2017, with approval arriving in April 2019. The intervening scrutiny included lending oversight, cybersecurity and compliance. The elegant interface would have to sit above a functioning, regulated institution. In banking, even a fresh start comes with a considerable reading list.

The luxury of seven minutes

Erwin described the early account-opening process as taking about seven minutes. She also described a lending model that could make economic sense for loans as small as $50,000. These were launch-era claims about the service she was building, and they reveal where she placed her attention: the small transaction and the interrupted working day.

Her argument was that entrepreneurs could raise money or hire people, but they could not manufacture more hours. A banking chore therefore had a cost beyond its fee. Every form asked for a little of the founder’s attention, and attention already had plenty of claimants.

“It's the only resource entrepreneurs can never get more of.”

Judith Erwin, on time, 2019

A cash-burn calculator gave the idea another practical expression. Customers could explore what a decision such as hiring someone might do to their cash position. That moved the account beyond a place to inspect yesterday’s balance. It could help a business owner consider tomorrow’s commitments.

There is a modest humanity in that ambition. Business owners often need an answer to a small, pressing question rather than another impressive dashboard. Erwin’s product argument made room for that person, with that decision, on that particular evening.

The useful part was under the bonnet

Grasshopper used Temenos’ T24 Transact system and built its own software connection layer around it. Other services connected through that layer. To a customer, this architecture would largely be invisible. To Erwin, it meant the bank could choose which outside tools to offer and how to connect them.

The arrangement also affected costs. The bank licensed the core and paid for cloud hosting, while its developers maintained the connections. A flat licensing arrangement offered a different calculation from paying for each account or transaction. Erwin’s enthusiasm for flexibility was attached to an operating model, with bills and responsibilities of its own.

She was equally willing to leave some work to others. At Money20/20, she explained that bill payment and mobile cheque deposits were capabilities the bank could obtain from partners. Its own effort could go into useful customer data and the relationship around it. Building a bank did not oblige her to build every component of banking.

That is an interesting kind of restraint for a founder. A service can be central to the customer’s day without needing to be invented in-house. The judgment lies in deciding what deserves the team’s time, then making the assembled experience feel coherent.

A grasshopper with an admiral in its name

At Money20/20 in 2019, Erwin appeared alongside Chime’s Chris Britt and Varo’s Colin Walsh, with Molly Wood moderating. Her concern was the commercial customer. Consumer banking had received considerable digital attention; she argued that the business side had fallen behind. A founder could reasonably wonder why the same phone offered two such different experiences.

The name of her bank carried its own answer to the industry’s inherited habits. Grasshopper honoured Grace Hopper, the computer scientist and US Navy rear admiral. The reference gave a financial institution a woman in computing as its namesake, a choice with more personality than another reassuring arrangement of geographical nouns.

Its visual identity carried a similarly personal idea. The mark drew inspiration from a handwritten cheque signature, with a recognisable G slipping into an abstract grasshopper. It was an attempt to let a formal business have some character. Even an institution entrusted with money could possess a little wit.

Golden Seeds, the angel investment network focused on women-led companies, became an investor. Erwin valued its experience with entrepreneurs as well as its capital. The relationship fitted the bank’s wider purpose: a company’s financial life involves introductions, judgment and people who understand what it is trying to become.

The chief executive as someone who clears the way

Erwin’s first three bosses were women. She later described a view of leadership centred on removing obstacles for colleagues, and encouraged founders to ask for help. The account is refreshingly practical: hiring, relationships and capital matter because they enable other people to do their work.

“I am successful if I can make other people successful.”

Judith Erwin, 2019

Her tenure as chief executive ended when Mike Butler succeeded her in May 2021. Grasshopper relaunched its platform under the new leadership in March 2022, expanding its business lines and introducing new technology. The founding chapter belongs to Erwin; the institution’s later decisions belong to the teams making them.

What remains distinctive about that chapter is its measure of ambition. She had helped build one bank, then returned to build another around the working lives of entrepreneurs. Beneath the charter, the capital and the software sat a recognisable wish: let people get on with their day. Banking had occupied enough of it already.