
Ask HN: Where do startups park cash? - gnicholas
Title says it all — what are best practices (or common pitfalls) for startups and cash management?<p>Brief background: startup is running at break-even and just received investment from NewSchools Venture Fund [1]. Now trying to figure out what to do with excess cash for 3-12 months.<p>1: http:&#x2F;&#x2F;www.newschools.org&#x2F;news&#x2F;congratulations-newest-ignite-cohort&#x2F; (we&#x27;re BeeLine)
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Dwolb
We typically park cash in a bank account to keep it liquid. Are you trying to
do something different than invest in your business?

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gnicholas
Bank account = checking? We're not trying to do anything fancy, but
considering that I always sweep cash out of my personal checking account (and
into a high-interest online savings account) I figured it would be prudent to
do the same here. Even if it's just $2k per year in extra interest, this seems
worthwhile. Is it not worth the time to manage?

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Dwolb
It's a money market. We move money from the money market to a checking account
to pay suppliers/make payroll. We also use company credit cards with to
increase available cash.

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sharemywin
If your using a start model you probably shouldn't have excess cash. You would
keep it liquid as possible. Why add risk to an already risky situation.

I'm sorry Mr investor, our business kicked ass and it would have been 10x this
year but we lost all your money because bitcoin tanked.

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gnicholas
Yeah not looking to invest in bitcoin or anything risky — just looking for a
prudent way to not miss out on interest payments, at the least.

I know there are some high-interest checking accounts that cater to
individuals, and I was hoping to learn if there are some that work well for
small businesses also.

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odonnellryan
I think you can find 1-2% money market accounts to park a lot of your cash in
that you still need to be liquid.

Otherwise, if you have a very large amount of money, you can always throw it
into other more secure investments and just take out lines of credit to use if
you need.

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gnicholas
Thanks! I'll check with my bank and see what they offer along these lines.
It's good to know what market rates are so that I can shop around if my bank
isn't competitive.

