Uncork Guide to Cash & Treasury Management Playbook

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By Joyce Lee



Note: This playbook is designed for Seed through Series B companies. As companies mature, treasury functions become more sophisticated and often require dedicated internal resources. That level of infrastructure is outside the scope of this document.

Below are foundational principles we recommend as a starting point for building a disciplined cash and treasury management strategy.

1. Engage a Finance Partner Early

At seed stage, there are countless things competing for your attention - but only a few truly matter. A common trap is spending time on activities that make you look like a company rather than doing the work that actually builds one.

Finance sits right in the middle of that tension.

It’s easy to either:

  • Over-engineer your financial systems too early

  • Or ignore them until there’s a problem

Both are mistakes.

You likely don’t need a full-time CFO immediately. But once you close your first institutional round, you should engage a strong outsourced or fractional finance partner.

A lightweight, experienced finance function can:

  • Actively manage cash and runway

  • Help you control burn

  • Build clear, investor-ready reporting

  • Identify cost-saving or revenue optimization opportunities

  • Ensure compliance and clean books for your next raise

The goal isn’t bureaucracy - it’s clarity and control. A good finance partner frees founders to focus on building.

2. Maintain Accounts at At Least Two Banks

March 2023 reminded everyone of a basic truth: banks can fail.

Even if you trust your primary institution, concentration risk is real. At minimum, maintain relationships with two separate banks.

Best practice:

  • Use a specialized or regional bank for day-to-day operations

  • Maintain excess cash at a large, systemically important bank (e.g., Bank of America, Citi, JPMorgan, Wells Fargo)

Most seed companies operate with a single bank account. While common, this introduces avoidable risk.

At minimum:

  • Use an Insured Cash Sweep (ICS) program to extend FDIC coverage beyond $250,000

  • Or use a government-backed sweep vehicle to reduce uninsured deposit exposure

Diversification is not overkill - it’s basic risk management.

3. Separate Operating Cash from Reserve Capital

Do not treat all cash the same.

We recommend:

  • 3–6 months of runway in your primary operating account

  • Remaining funds held separately in yield-generating, low-risk vehicles

This separation:

  • Reduces operational disruption risk

  • Forces discipline around liquidity planning

  • Helps prevent accidental overexposure to one institution

Your operating account should prioritize immediacy.

Your reserve account should prioritize safety and modest yield.

4. Invest Excess Cash for Safety — Not Speculation

Venture capital funds business growth - not treasury speculation.

Investors do not expect founders to generate returns from financial markets. They expect capital preservation.

Any excess cash not needed for near-term operations should be placed in ultra-safe, liquid vehicles focused on stability.

Appropriate Vehicles

High-Yield Savings Accounts

FDIC-insured and highly liquid. Note coverage limits of $250,000 per depositor, per institution.

Insured Cash Sweep (ICS)

Automatically distributes deposits across a network of FDIC-insured banks, extending insurance coverage into the millions while maintaining liquidity.

Overnight Repo Sweeps

Excess funds are swept nightly into U.S. Treasuries and returned the next day. This reduces bank concentration risk and maintains next-day liquidity.

Government Money Market Mutual Funds (MMMFs)

Invest in short-term U.S. government obligations or Treasury-backed repo agreements. Provide same-day liquidity and capital preservation.

⚠️ Important Distinction:

Money market mutual funds are investment vehicles and are not FDIC-insured. Money market deposit accounts are bank products and are FDIC-insured.

What We Do Not Recommend at Seed Stage

❌ Brokered CDs (illiquid, unnecessary term risk)

❌ Corporate bonds or structured notes (complex, inappropriate risk)

❌ Crypto, equities, private funds (speculative, governance risk)

Treasury is not a growth strategy. It is a risk-management function.

5. Maintain a Rolling 12-Week Cash Forecast

Short-term liquidity surprises kill companies - even healthy ones.

Maintain a rolling 12-week forecast updated regularly. It should clearly show:

  • Cash on hand

  • Expected inflows

  • Payroll timing

  • Major vendor payments

  • Tax obligations

This isn’t about precision to the dollar, it’s about visibility.

If you know when a squeeze is coming, you can act.

If you don’t, you react.

6. Identify Critical Vendors and Key Personnel

Third-party risk is real.

During the SVB crisis, some startups were unable to run payroll because their providers cleared through SVB.

Map out:

  • Mission-critical vendors (payroll, benefits, accounting, core infrastructure)

  • Backup providers or contingency plans

  • Core employees whose sudden absence would materially disrupt operations

Resilience is not paranoia. It is preparedness.

7. Establish & document your Investment policy

Even at seed stage, documenting how you manage company cash builds discipline and trust.

Your policy can be simple:

  • Permitted investment types

  • Liquidity requirements

  • Bank diversification standards

  • Board review thresholds

As balances grow, consider formal board approval.

Documentation signals maturity - to investors, auditors, and future acquirers.

8. QSBS Considerations

If your company aims to qualify for Qualified Small Business Stock (QSBS) treatment, treasury decisions matter.

Under the “portfolio stock limitation,” investing more than 10% of corporate assets in investment securities (such as certain mutual funds or money market mutual funds) may jeopardize the active business requirement.

Generally safe working capital vehicles include:

  • Checking and savings accounts

  • Money market deposit accounts

  • Certificates of deposit

  • U.S. Treasury bills

  • ICS programs (deposit-based)

QSBS qualification must be met for substantially all of each shareholder’s holding period. That means early treasury decisions can have long-term tax consequences.

When in doubt, consult experienced tax counsel.

Final Thoughts

Cash and treasury management is a strategic function - not just a back-office task. Getting it right protects your company, your employees, and your investors. Even simple, well-documented policies can help prevent the next banking crisis from knocking your business off track.

Cash and treasury management is not a back-office detail.

It is a strategic function that protects:

  • Your runway

  • Your employees

  • Your investors

  • Your future financing

Strong companies don’t just raise capital - they steward it.

Simple, disciplined, well-documented policies today can prevent avoidable crises tomorrow.