[polishdude20]

Then again, to play devils advocate, doing all the other stuff in a new way might also help your company break out of the cycle that typically impacts startups. It may be that the other things you do apart from your product are what make it successful.

[dannyw]

Figuring out a better way to ~~invest~~ speculate with your company's balance sheet is seriously unlikely to improve the trajectory of your company.

[stackghost]

I mean if you have a significant chunk of free cash sitting around there's almost no reason not to put a portion of it in 3-6 month Treasuries or something.

The return won't be much but it's better than letting the cash sit idle and evaporate due to inflation

[luke5441]

In a competitive banking landscape the bank would do it for you, then just give you a competitive interest rate on your account. Is that not present in the US?

[NickC25]

Uh, that's not "better".

If you have a huge chunk of change sitting around, you've raised too much or too early, and you've successfully diluted yourself for zero reason.

If you actually had a reason to raise a lot of money, you'd do with the money what you promised the investors (who gave you the money) you would.

I've raised before. I raised what I needed. Not a penny more because I didn't need the money.

[stackghost]

I too have raised before.

I'm not saying raising and then buying T-Bills is better than just raising less.

I'm saying if you find yourself with excess cash, you can't just un-raise. In that scenario, then short term T Bills are strictly better than cash.

[NickC25]

The question is why you'd use money you raised for anything but the reason you raised it. You've probably raised a shit ton more than I have, but hear me out - when one raises, there's generally a timeline of fund deployment from the startup's UoF, right? That's how it was done in my case - we tell the investor what we need, why we need it, and when we need it, etc. And then if the investor agrees to invest, it's not just a lump sum sitting in the bank - a good amount of that money gets deployed to help the startup fulfill its mission.

I get that if you're running super lean and you've raised enough to run lean for a while and use cash when you need to, but at the same time why raise more than you have need for?

[cj]

I've seen VC's who care a lot about understanding how their companies are going to spend the money. And other VC's who don't even ask the question, or accept generalities like "hiring, scaling" with equally loose timelines.

The latter group most commonly in the bay area.

[hollerith]

>if you find yourself with excess cash, you can't just un-raise

I always thought a startup can return cash to investors as long as the payments or dispersements are proportional to the amount of stock owned.

[stackghost]

Depends on the funding vehicle. If you're on a SAFE, and still a going concern, then I think returning investor funds would trigger a priced round and you'd end up converting at a (hopefully) high valuation

[carleverett]

Let’s see:

- 12 months runway - $100k/mo. burn rate - 4% APR

Gives you about $25k interest.

Seems worth it to me.

[debo_]

MicroStrategy?

[wmf]

It's about to collapse for the second time.

[Devasta]

Not once in mankind's history has any great product or feat been enhanced or achieved through the use of timesheets.

Don't get bogged down with that stuff.

[UqWBcuFx6NV4r]

This comment really shows how far the SV VC culture still is from running profitable businesses with solid fundamentals. No surprise that I am hearing this on the same website where people come to act like hard-done-by factory workers whenever [incredibly bloated and dysfunctional FAANG] lays people off after facing the real-world financial realities.

For the love of God, no. Do not do that. The cycle begins when you take the money. How there are still people here that don’t get this, I don’t understand.

[raw_anon_1111]

The purpose of VC’s were never to fund companies until they become profitable, it’s the find the “bigger fool”.

Occasionally it’s the public market…

https://medium.com/@Arakunrin/the-post-ipo-performance-of-y-...

Most often for successful exits, it’s to get acquired and shut down the original product with a “Our Amazing Journey” blog post.

[no_wizard]

That chart is telling about the durability of this business, but do we actually know the precise point at which YCombinator as an entity sold out?

For instance, I know Coinbase may be down -22% from the IPO price, but that doesn't mean YCombinator lost money nor made very little. If they, for instance, sold off during the first few days of the IPO they would have made out quite well.

There's also the whole question of how much money did YCombinator put in vs what they got out.

Without knowing this, about all the chart tells me is YCombinator is not a predicated on building exceedingly durable businesses, but it doesn't mean they lost money on any of these investments either.

[raw_anon_1111]

YC isn’t the “bigger fool”, their business model is great for them. Of course they made money at IPO. They don’t care about durable businesses. More than likely they sold at IPO.

[no_wizard]

I realize, but that's my entire point: the durability of the business as represented by these valuations says nothing meaningful about YCombinator startups other than they aren't building alot of highly durable businesses.

[HaZeust]

You've taken VC money at that point. Hate to say it, but doing that means you're voluntarily going into the cycle with no intent to break it.

[bandrami]

"A marathon sounds like a really long way to run. Maybe if I simultaneously juggle it will distract me from how tired I am."