4 ms·

You don't plop 35MM into a single bank account and sit on it. The cringe isn't about feeling bad for Chase. It's about watching a 22 year old learn how to manag

by dcow 4y ago

You don't plop 35MM into a single bank account and sit on it. The cringe isn't about feeling bad for Chase. It's about watching a 22 year old learn how to manage incredible amounts of cash.

jojobas 4y ago
Are startups expected to hire a guy to stage fixed-term deposits across multiple banks and gamble on stocks and foreign exchange? Pretty sure they are not.
- zer00eyz 4y ago
  Depends on how big you are. If your first friend at any company isn't someone in accounting your doing it wrong. Good accounting is not something you outsource, and a good accounting team is worth their weight in gold. If your concerned about exchange rates, you better have competent folks in accounting.
  - mcherm 4y ago
    > Good accounting is not something you outsource I'm happy to believe you on that point, but can you explain WHY? It appears to me that accounting is the exact type of generalized skill with well-established standards that makes sense to outsource.
    - zer00eyz 4y ago
      Thats the point, good accounting ISNT a generalized skill at all. Once you get past "how much is in the checking account" and into the why attached to quantity then you get insight. What is the cost and value of a client? Are there fixed costs (acquisition, setup) and variable (AWS/Usage). The ebb and flow of money and someone keeping an eye on it matter. Where and how you bank matters (lesson some are just learning). Hell just pricing a product internationally is a task that genuinely requires an accountant. Go hang with accountants, learn what they do and see the insight they provide.
  - TimTheTinker 4y ago
    Accountants should be the ones running the companies. Mine is run by them, and it's great. There are some incredible perks, like always knowing the company is financially in a very good place and taking appropriate risks, a culture of transparency and collaboration ... I could go on.
    - zamnos 4y ago
      First time I've heard a positive review about a company being run by the bean counters, who are generally more known for being brought in and cutting tiny luxuries which don't generate money or make financial sense, like free sodas in the break room.
      - gcr 4y ago
        “Being brought in” could be the crucial difference, yeah? When a company starts with beans on staff from the start, maybe there’s more of a sense of security
      - deleted 4y ago
        [deleted]
      - TimTheTinker 4y ago
        They're accountants, but I wouldn't call them "bean counters". They have a vision for the office of the CFO, and it's that the accounting team rises above mere bean counting into financial leadership. The company was also a VC-backed startup and is on the road to IPO, so it's run like an investment, not a cost center -- and hiring and keeping great employees is a priority. The perks and benefits are really great. It has won awards for the last ~5 years for being the "best company to work for in $region".
  - jojobas 4y ago
    You might be confusing accounting with financial management. Accounting is outsourced by nearly 100% of startups. Financial management for startups with respect to "how big you are" is almost always "not big enough" until you have tens of millions. Both seed and series a are usually to be spent within a couple of years and hiring a full time financial manager to represent 5%-10% of payroll is just not worth it, he won't recoup his salary even by excellent trickery.
    - jbverschoor 4y ago
      All the same right? Something with money and numbers. Just like everybody in tech is doing something with computers and writing code
      - jojobas 4y ago
        Oh you're a software developer? Can you fix my dishwasher?
        jbverschoor 4y ago
        Be careful what jokes you make about samsung iot appliances
- kyawzazaw 4y ago
  some are doing laddered treasury bills
csomar 4y ago
Being focused on his startup instead of maximizing the yield of these $35M allowed him to turn it into a $5.5Bn company.
- vinay_ys 4y ago
  This. It applies in personal life too. In the post covid world, I find many young engineers fall into the trap of squeezing more yield out of their meagre savings early in their career through financial engineering rather than focusing on their personal development and growing in their actual professional lives. All the amateur investors who made big returns in the 2020-22 period and thought they figured it out will now have a hard time making sense of the markets in the new regime of high interest rates.
  - ashwagary 4y ago
    >All the amateur investors who made big returns in the 2020-22 period and thought they figured it out Chasing big returns generally leads to massive losses so I cant fault people for sitting in cash but I dont recommend taking inflation lightly. The least one should do is beat that hurdle rate and conserve value.
  - dcow 4y ago
    But it’s not bad to diversify risk early on and have a plan for that. High yield savings accounts and treasury notes are standard practice. We’re not talking about founders taking moonshots in the market. We’re talking about $35MM in a bank account that doesn't even match inflation.
    - dcow 4y ago
      To put that into perspective. That's $1MM a year (at %3 inflation) going into the toilet just because you don't want to do some minimal cash management. You could hire a CFO for that price and it would pay for itself 3 times over. I mean I get the vibe and totally agree that you don't want to overthink things. But I also think it's easy to underestimate the value you're leaving on the table and the risk you're exposing yourself to by not giving it any thought.

by dcow 4y ago

You don't plop 35MM into a single bank account and sit on it. The cringe isn't about feeling bad for Chase. It's about watching a 22 year old learn how to manage incredible amounts of cash.

jojobas 4y ago

Are startups expected to hire a guy to stage fixed-term deposits across multiple banks and gamble on stocks and foreign exchange? Pretty sure they are not.

zer00eyz 4y ago
Depends on how big you are. If your first friend at any company isn't someone in accounting your doing it wrong. Good accounting is not something you outsource, and a good accounting team is worth their weight in gold. If your concerned about exchange rates, you better have competent folks in accounting.
- mcherm 4y ago
  > Good accounting is not something you outsource I'm happy to believe you on that point, but can you explain WHY? It appears to me that accounting is the exact type of generalized skill with well-established standards that makes sense to outsource.
  - zer00eyz 4y ago
    Thats the point, good accounting ISNT a generalized skill at all. Once you get past "how much is in the checking account" and into the why attached to quantity then you get insight. What is the cost and value of a client? Are there fixed costs (acquisition, setup) and variable (AWS/Usage). The ebb and flow of money and someone keeping an eye on it matter. Where and how you bank matters (lesson some are just learning). Hell just pricing a product internationally is a task that genuinely requires an accountant. Go hang with accountants, learn what they do and see the insight they provide.
- TimTheTinker 4y ago
  Accountants should be the ones running the companies. Mine is run by them, and it's great. There are some incredible perks, like always knowing the company is financially in a very good place and taking appropriate risks, a culture of transparency and collaboration ... I could go on.
  - zamnos 4y ago
    First time I've heard a positive review about a company being run by the bean counters, who are generally more known for being brought in and cutting tiny luxuries which don't generate money or make financial sense, like free sodas in the break room.
    - gcr 4y ago
      “Being brought in” could be the crucial difference, yeah? When a company starts with beans on staff from the start, maybe there’s more of a sense of security
    - deleted 4y ago
      [deleted]
    - TimTheTinker 4y ago
      They're accountants, but I wouldn't call them "bean counters". They have a vision for the office of the CFO, and it's that the accounting team rises above mere bean counting into financial leadership. The company was also a VC-backed startup and is on the road to IPO, so it's run like an investment, not a cost center -- and hiring and keeping great employees is a priority. The perks and benefits are really great. It has won awards for the last ~5 years for being the "best company to work for in $region".
- jojobas 4y ago
  You might be confusing accounting with financial management. Accounting is outsourced by nearly 100% of startups. Financial management for startups with respect to "how big you are" is almost always "not big enough" until you have tens of millions. Both seed and series a are usually to be spent within a couple of years and hiring a full time financial manager to represent 5%-10% of payroll is just not worth it, he won't recoup his salary even by excellent trickery.
  - jbverschoor 4y ago
    All the same right? Something with money and numbers. Just like everybody in tech is doing something with computers and writing code
    - jojobas 4y ago
      Oh you're a software developer? Can you fix my dishwasher?
      - jbverschoor 4y ago
        Be careful what jokes you make about samsung iot appliances
kyawzazaw 4y ago
some are doing laddered treasury bills

csomar 4y ago

Being focused on his startup instead of maximizing the yield of these $35M allowed him to turn it into a $5.5Bn company.

vinay_ys 4y ago
This. It applies in personal life too. In the post covid world, I find many young engineers fall into the trap of squeezing more yield out of their meagre savings early in their career through financial engineering rather than focusing on their personal development and growing in their actual professional lives. All the amateur investors who made big returns in the 2020-22 period and thought they figured it out will now have a hard time making sense of the markets in the new regime of high interest rates.
- ashwagary 4y ago
  >All the amateur investors who made big returns in the 2020-22 period and thought they figured it out Chasing big returns generally leads to massive losses so I cant fault people for sitting in cash but I dont recommend taking inflation lightly. The least one should do is beat that hurdle rate and conserve value.
- dcow 4y ago
  But it’s not bad to diversify risk early on and have a plan for that. High yield savings accounts and treasury notes are standard practice. We’re not talking about founders taking moonshots in the market. We’re talking about $35MM in a bank account that doesn't even match inflation.
  - dcow 4y ago
    To put that into perspective. That's $1MM a year (at %3 inflation) going into the toilet just because you don't want to do some minimal cash management. You could hire a CFO for that price and it would pay for itself 3 times over. I mean I get the vibe and totally agree that you don't want to overthink things. But I also think it's easy to underestimate the value you're leaving on the table and the risk you're exposing yourself to by not giving it any thought.