Treasury management for busy founders

It's Wednesday afternoon and your Series A funding just hit your account, which has your finance team debating the best place to put it. Should it go into the money market fund? Split between T-bills and savings? What about that new sweep account everyone's talking about? Where is the best place to protect your cash while also making it extend your runway, with convenient liquidity?

It’s a classic dilemma that can lead to the type of analysis paralysis that slows finance teams down, and takes their focus away from more strategic work. The result is finance teams at scaling startups spending too much time on cash positioning decisions that could run on autopilot. While you're focused on building the next breakthrough product, manual treasury management is quietly draining productivity and leaving money on the table. The good news? Modern treasury management doesn't have to be complicated or time-consuming.

The hidden cost of manual cash management

Most founders think treasury management means occasionally moving money between accounts and checking rates once a quarter. But the real cost isn't just the forgone yield from suboptimal positioning. It's the operational overhead that scales badly as your business grows.

Your finance team spends time they should be dedicating to strategic analysis instead researching where to put this week's cash. They're manually tracking FDIC limits across multiple banks instead of focusing on runway planning. They're coordinating transfers to ensure payroll coverage instead of building better financial forecasting models.

The opportunity cost compounds as your team grows. At $2 million in the bank, manual treasury management might cost you a few hours per month. At $10 million, you're looking at hours every week. By the time you're managing $50 million across multiple entities, manual cash positioning can become a part-time job that produces minimal value.

Smart founders recognize that treasury management should be infrastructure, not a recurring project. The best systems make optimal decisions automatically while giving you visibility and control when you need it.

Speed and liquidity come first

Before optimizing for yield, you need to nail the basics. The cardinal rule of startup treasury management is simple: never compromise operational liquidity for extra yield. Imagine missing payroll just because your cash was tied up in a 30-day CD? It’s not a reality you want to face.

Start with your true liquidity needs. Most startups need immediate access to 60-90 days of operating expenses for true emergencies, plus weekly access to regular payroll and vendor payments. This operating cash should live in accounts with same-day availability, even if it means accepting lower returns.

Calculate your monthly cash outflows including payroll, rent, vendor payments, and unexpected expenses. Add a 20-30% buffer for growth or unforeseen costs. This amount should always be available within 24 hours. Everything above this threshold becomes your yield optimization target.

Modern platforms like Brex can solve this by providing same-hour liquidity on higher-yielding investments. Treasury sweep accounts, for example, automatically invest your cash in treasury securities while maintaining immediate access for business operations. You can get both liquidity and yield without the traditional tradeoff.

Principal protection is a top priority

Your investors likely didn't give you capital to become a hedge fund manager. They expect you to put your cash to work for the business while being thoughtful about fund safety. Adding principal risk to chase higher yields is one of the fastest ways to damage investor confidence and create unnecessary business risk.

Try sticking to government-backed securities or FDIC-insured accounts for your core cash reserves. Treasury bills, government money market funds, and insured bank deposits should form the foundation of your treasury strategy for reduced risk. These options provide predictable returns, with reduced principal risk.

Corporate bonds, even high-grade ones, can introduce credit risk that most startups avoid. Equity investments are usually completely off limits for operating cash, no matter how attractive the market looks. Your core business already carries enough risk without adding investment risk to your treasury operations.

The exception is cash you do not expect to need for 12+ months, where you might consider ultra-conservative fixed income options. Even then, you may want to limit this to a small percentage of total cash and stick to institutional-grade investments with strong liquidity provisions.

FDIC protection strategies for larger balances

Once your cash reserves exceed $250,000, FDIC insurance becomes a strategic consideration rather than an automatic protection. The standard FDIC limit applies per depositor, per FDIC-insured bank, per ownership category, but smart financial platforms have built solutions that address this limitation.

The traditional approach required managing relationships with multiple banks to spread deposits and multiply coverage limits. This created operational complexity and reconciliation headaches that scaled poorly as businesses grew.

Modern financial platforms help solve this by partnering with multiple FDIC-insured institutions behind the scenes. Instead of managing four different banking relationships yourself, the platform automatically spreads your deposits across partner banks, ensuring complete FDIC protection while maintaining a single relationship and dashboard.

Platforms built for scaling startups can automatically optimize between FDIC-protected deposits and government securities based on your cash levels, ensuring maximum protection without requiring you to manage multiple relationships or track coverage limits manually.

Automation that actually works

The best treasury management systems make optimal decisions without requiring constant attention. Look for platforms that automatically sweep excess cash into higher-yielding investments while maintaining the liquidity buffers you specify.

Set clear parameters for automated decisions. Define your minimum liquidity requirements, maximum acceptable maturities, and yield targets. The system should operate within these guardrails without requiring daily oversight. You want to review performance monthly or quarterly, not manage positions daily.

Consider tools that integrate with your existing financial systems to eliminate more manual reconciliation work. The best platforms connect directly to your accounting software, providing real-time visibility into cash positions and investment performance. Your month-end close should include treasury positions automatically without additional data entry.

Why operational efficiency matters more than perfect optimization

Companies with streamlined treasury operations are more likely to outperform those managing cash manually. The difference isn't just higher yields from better positioning, it's the strategic advantage of having your finance team focused on growth initiatives instead of routine cash decisions.

When your treasury runs automatically, your CFO can spend time on runway planning and investor relations instead of researching money market rates. Your finance team can build better forecasting models instead of coordinating wire transfers. Your founders can focus on product development and customer acquisition instead of worrying about the safety of their runway.

This operational efficiency becomes a competitive advantage. While other companies may waste cycles on manual financial operations, you're optimizing the activities that actually drive business value. In highly competitive markets, this difference in focus and execution speed often determines which companies succeed.

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