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by stackghost 141 days ago
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.
2 comments
NickC25 141 days ago
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?

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cj 141 days ago
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.

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NickC25 141 days ago
>And other VC's who don't even ask the question, or accept generalities like "hiring, scaling" with equally loose timelines.

Which is crazy to me.

You write a check for a lot of money, and don't care how/when/where the money is spent? Or you accept bullshit vague answers?

That's not due diligence, that's deliberate ignorance.

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hollerith 141 days ago
>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.

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stackghost 141 days ago
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
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