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Spend a few hours with your finance team to minimize risk. That's great for people who have a finance team, but a startup with over $250k in the bank can easil

by lacker 4y ago

Spend a few hours with your finance team to minimize risk. That's great for people who have a finance team, but a startup with over $250k in the bank can easily be just one or two people who raised money and have no particular finance expertise. Personally I think we should bump the limits - it should be reasonable for a startup that just raised $10m to be able to put that money somewhere safe, and pay rent, payroll, and an AWS bill with it, without having to hire a "finance team".

eropple 4y ago
> it should be reasonable for a startup that just raised $10m to be able to put that money somewhere safe, and pay rent, payroll, and an AWS bill with it, without having to hire a "finance team" Aren't VCs supposed to support their investments with expertise? This is eminently socializable expertise. Nobody has made a real case substantiating why the entire economy does not need to insure upwards to protect startups that don't understand how to secure a giant sack with a dollar sign on it.
AH4oFVbPT4f8 4y ago
Why are VC giving money to a company who can't manage it?
jnwatson 4y ago
Exactly. Having to split your money among multiple banks should be a mature/medium-sized company problem, not a mom-and-pop or 30 person startup.
- laboratorymice 4y ago
  This is setting a very low bar for entrepreneurs. What else should be only a "mature company" problem? Should startups also not have to care about doing a good job in other fields orthogonal to the product itself like recruiting, marketing, governance, accounting, security? These are all things that come with the territory of starting your own company. Managing your own finances is just one of them, and it absolutely should be the startup's responsibility. It can delegate if it wants to, but "I'm too small to address it at all" is just naivete or incompetence.
- eropple 4y ago
  Few "mom-and-pop" companies get to the point where they have $250K in liquid business cash without hiring an accountant. A "30 person startup" is waving around the cash supplies of a much, much larger actual-business and if those very sage VCs cannot guide them to safeguard that investment I am at a loss as to why every other depositor should do so for them.
nrmitchi 4y ago
I completely agree with your point here, but I also don’t agree with this announced decision. There should definitely be a place for a company to hold $10M without risk. Maybe $20M. That doesn’t mean that it needs to be the same place for a company to dump $3B. My point is that there is a lot of room between the (previous?) $250k “limit”, and the apparently new “infinity” limit.
- eropple 4y ago
  > There should definitely be a place for a company to hold $10M without risk. Maybe $20M. There is. It's called a T-bill. I know how to buy them, and I am not a hotshot startup CEO. I think it's okay to expect some level of maturity out of somebody handed That Kind Of Money.

by lacker 4y ago

eropple 4y ago

> it should be reasonable for a startup that just raised $10m to be able to put that money somewhere safe, and pay rent, payroll, and an AWS bill with it, without having to hire a "finance team" Aren't VCs supposed to support their investments with expertise? This is eminently socializable expertise. Nobody has made a real case substantiating why the entire economy does not need to insure upwards to protect startups that don't understand how to secure a giant sack with a dollar sign on it.

AH4oFVbPT4f8 4y ago

Why are VC giving money to a company who can't manage it?

jnwatson 4y ago

Exactly. Having to split your money among multiple banks should be a mature/medium-sized company problem, not a mom-and-pop or 30 person startup.

laboratorymice 4y ago
This is setting a very low bar for entrepreneurs. What else should be only a "mature company" problem? Should startups also not have to care about doing a good job in other fields orthogonal to the product itself like recruiting, marketing, governance, accounting, security? These are all things that come with the territory of starting your own company. Managing your own finances is just one of them, and it absolutely should be the startup's responsibility. It can delegate if it wants to, but "I'm too small to address it at all" is just naivete or incompetence.
eropple 4y ago
Few "mom-and-pop" companies get to the point where they have $250K in liquid business cash without hiring an accountant. A "30 person startup" is waving around the cash supplies of a much, much larger actual-business and if those very sage VCs cannot guide them to safeguard that investment I am at a loss as to why every other depositor should do so for them.

nrmitchi 4y ago

I completely agree with your point here, but I also don’t agree with this announced decision. There should definitely be a place for a company to hold $10M without risk. Maybe $20M. That doesn’t mean that it needs to be the same place for a company to dump $3B. My point is that there is a lot of room between the (previous?) $250k “limit”, and the apparently new “infinity” limit.

eropple 4y ago
> There should definitely be a place for a company to hold $10M without risk. Maybe $20M. There is. It's called a T-bill. I know how to buy them, and I am not a hotshot startup CEO. I think it's okay to expect some level of maturity out of somebody handed That Kind Of Money.