What are the best practices for treasury management for startups at different stages of growth?

I had a lot of people ask me this question over the weekend. At the time, we only had $1 million in FDIC insurance. Now, we have $3 million with our banking partner Evolve Bank & Trust. 

I'd recommend putting your operational money in a working bank account below the FDIC insurance limit. With $3 million FDIC insurance, most companies don't need much more than that in their operational bank accounts. There are obviously exceptions for larger companies, but for most, $3 million is more than enough. I suggest putting the rest in US government T-Bills, which we give access to via Mercury Treasury. It's a Vanguard Mutual fund with short-term US Government T-Bills.

That's a safe arrangement, which is why we launched Vault, a product that recommends this setup. The only other thing I'd recommend is setting up at least one other bank account, just in case, and having some money in it. While I believe our Mercury arrangement is safe, it's still prudent to follow this advice.

For smaller startups with less than $3 million, as long as you're below the FDIC limit, you don't need to think much more about it. If you're at a big bank, consider choosing one that provides extra FDIC insurance like Mercury does. Treasuries become more of a yield consideration rather than a safety one, and people are generally more focused on safety right now.

If you've raised $4 million, you'd likely have an arrangement between the FDIC and treasuries. With $10 million, the arrangement is fairly similar. At $100 million, you get into corporate treasury management and asset management, and we have a partner that can help. You might allocate $20 million for use in the next six months and put the remaining $80 million into a laddered securities and bonds portfolio. We have a partnership with Morgan Stanley to facilitate that.