As I said on Twitter yesterday, most (if not almost all) VCs — ourselves included — have failed to talk to founders about where they store their cash. We spend enormous amounts of time discussing runway, burn, and financing with founders. But if a startup has stored its cash safely is, unfortunately, not a question that I’ve ever asked. And although I’ve been in hundreds of board meetings with dozens of companies, I don’t remember hearing that question from any other VC either.
Here is the simple guide that could have saved founders a huge amount of stress over the last few days and that I wish we had published years ago. We’ve put this together very quickly over the last few days, so consider it a v0.9 that we might update in the coming days and weeks. If you have any feedback, let us know!
You want your money to be as safe as possible, but the setup needs to be manageable. Managing 40 bank accounts (because you have $10M and the FDIC limit is $250k) is, obviously, not a practical solution. On the other end of the spectrum, having everything in one account is not a good idea either (more on that below).