PodcastsThis Week in StartupsManaging your treasury in 2023 | Startup Finance Basics w/ Kruze's Scott Orn | E1843

Managing your treasury in 2023 | Startup Finance Basics w/ Kruze's Scott Orn | E1843
This Week in StartupsWed Nov 08 2023
Startup Finance Basics:
- Emphasis on the importance of tight accounting and finances for startups, highlighting the need to have secure financial practices in place.
- Scott Orn from Kruze, a CFA passionate about startups, discusses the current state of the market in 2023, noting an increase in median cash at startups after weaker companies have been cold.
Capital Preservation, Liquidity, and Risk Management:
- Stress on capital preservation through safe investments like short-term government bond funds and U.S. treasuries as a means to protect startup capital.
- Importance of maintaining liquidity with quick access to capital within one to three days highlighted for effective financial management.
- Emphasized risk management as essential to avoid speculative or risky investment choices, advocating for board-ratified investment plans aligned with startup goals.
Banking Relationships and Treasury Management:
- Recommendation for startups to diversify bank relationships by utilizing legacy banks (e.g., JP Morgan) alongside neobanks (e.g., Brex, Mercury) for enhanced flexibility and security in managing their treasury.
- Utilization of Insured Cash Sweeps (ICS) products offered by banks to spread deposits across multiple FDIC-insured banks overnight highlighted for increased safety measures.
- Trend observed in startups having two or more bank accounts noted as a strategic approach for flexibility and security in managing their treasury.