Treasury Strategy
Treasury Strategy is the framework for managing a company's cash, short-term investments, banking relationships, FX exposure, debt, and counterparty risk. It answers four questions: WHERE does cash sit (bank accounts, money market funds, T-Bills), HOW MUCH is liquid vs. invested for yield, HOW MANY counterparties hold the cash (concentration risk), and HOW is the cash protected against rate changes, FX swings, and bank failures. The Silicon Valley Bank collapse in March 2023 exposed how many startups had treasury strategies that were essentially 'all $40M sits at SVB earning 0.05%' โ a single point of failure. Modern treasury strategy explicitly addresses bank diversification, yield optimization, and operational liquidity in tiers.
The Trap
The pre-2023 trap was treating treasury as a non-strategic function โ leaving all cash at one bank in a non-interest-bearing account because 'we're a startup, not a hedge fund.' The post-SVB trap is over-correction: spreading cash across 8 banks, opening complex sweep accounts, and burning weeks of CFO time managing structures that should be automated. The third trap is yield-chasing without liquidity discipline โ putting too much cash into 6-month T-Bills only to need it for an acquisition or surprise burn. Treasury must balance YIELD, LIQUIDITY, and SAFETY โ over-optimizing any one of the three creates risk in the other two.
What to Do
Implement a tiered treasury structure: Tier 1 (operational, ~3 months of expenses) in primary operating bank with overnight liquidity; Tier 2 (strategic reserve, ~6-12 months of expenses) in money market funds or short-duration T-Bills with 1-30 day liquidity; Tier 3 (long-horizon excess) in 3-12 month T-Bills earning maximum risk-free rate. Diversify across 2-3 banks (ideally one G-SIB like JPMorgan, one regional, plus a fintech like Mercury or Brex with FDIC sweep). Document the treasury policy in writing, board-approved. Review quarterly. Match currency exposure to revenue exposure (if 30% of revenue is EUR, hold 30% of operating cash in EUR).
Formula
In Practice
Apple's treasury operation, run by senior treasury executives reporting to the CFO, manages ~$160B+ across multiple currencies, geographies, and instruments. Apple holds short-duration government bonds, corporate bonds, money market instruments, and equity hedges. Their disclosed net cash position is managed against share buyback programs and dividend obligations. Compare to mid-2010s Tesla treasury โ for years Tesla held tens of millions in operating cash with minimal yield management because Elon Musk treated treasury as overhead. Tesla also famously moved $1.5B into Bitcoin in early 2021 (then sold most at a loss within 12 months) โ an undisciplined treasury decision driven by personal conviction rather than treasury strategy. Modern Tesla treasury is more conventional. Then there's the SVB poster children: many YC startups had 100% of cash at SVB and faced existential payroll risk in 72 hours when SVB failed.
Pro Tips
- 01
KnowMBA POV: every CFO should have a written treasury policy, approved by the board. The policy should specify max concentration per bank, allowed instruments, max duration, FX rules, and approval thresholds for treasury moves above $X. If you don't have this in writing, you're improvising.
- 02
FDIC insurance covers $250K per depositor per bank. For a startup with $20M cash, FDIC coverage is meaningless without a sweep network (Mercury IO, Brex Treasury, or similar) that distributes funds across multiple FDIC-insured banks. Get on a sweep network before you have $5M in any single bank.
- 03
Maturity laddering for excess cash beats single-bullet investments. A $30M Tier 3 portfolio split into $5M maturities each month (6-month T-Bills) provides $5M of natural liquidity per month and earns near-peak rates. Single 6-month T-Bill is binary โ your liquidity all arrives at month 6.
Myth vs Reality
Myth
โStartups don't need treasury management โ that's for big companiesโ
Reality
Wrong. The moment you raise $5M+, treasury matters. SVB failure exposed that hundreds of startups had no treasury strategy and faced near-fatal payroll risk. Even a $10M Series A company needs a written treasury policy and sweep account.
Myth
โYield optimization is the goal of treasuryโ
Reality
Liquidity and safety come first. The goal of treasury is 'never miss payroll, never lose principal, then optimize yield.' A treasurer who chases an extra 50bps of yield by sacrificing liquidity has misunderstood the job.
Try it
Run the numbers.
Pressure-test the concept against your own knowledge โ answer the challenge or try the live scenario.
Knowledge Check
Your startup has $25M raised in a recent Series A. All cash sits at one regional bank earning 0.1%. Risk-free 3-month T-Bill yield is 5.0%. What's the BIGGEST risk you should address FIRST?
Industry benchmarks
Is your number good?
Calibrate against real-world tiers. Use these ranges as targets โ not absolutes.
Treasury Concentration (% at largest bank)
Post-SVB norms; sweep accounts count as diversified if covering 30+ banksDiversified (Best)
< 40% at any single bank
Healthy
40-60%
Concentrated
60-80%
Risky
80-95%
SVB-Style Risk
> 95%
Source: Brex Treasury, Mercury Treasury post-SVB analysis
Real-world cases
Companies that lived this.
Verified narratives with the numbers that prove (or break) the concept.
Apple
Long-running (2010s-2024)
Apple's treasury operation is among the most sophisticated in any non-financial company. They manage $160B+ of cash and marketable securities across short-duration T-Bills, corporate bonds, money market instruments, and equity hedges. Apple structured offshore cash to optimize tax (until 2017 tax reform), executed massive bond issuances (the 'Apple bond' era of 2013-2018) to fund buybacks while preserving offshore cash, and runs sophisticated FX hedging across 100+ currencies. Apple's treasury contributes meaningfully to interest income and earnings stability โ treasury is treated as a strategic function, not overhead.
Cash & Marketable Securities
$160B+
Currencies Hedged
100+
Bond Issuance for Buybacks
>$100B since 2013
Treasury Team Size
Dozens of professionals
At scale, treasury is a profit center, not a cost center. The discipline that produces $5-10B/year of net interest income at Apple is the same discipline (in miniature) that adds 1-2 months of runway at a Series A startup.
SVB-Concentrated Startups
March 2023
When Silicon Valley Bank failed on March 10, 2023, hundreds of YC and venture-backed startups discovered they had >95% of cash at SVB. Roku disclosed $487M (26% of total cash) at SVB. Roblox disclosed ~$150M. Hundreds of smaller startups had 100% concentration. For 72 hours over the weekend, payroll for the following Monday was at risk for thousands of employees. The federal government invoked the systemic risk exception to backstop deposits, but the lesson stuck: single-bank treasury is an existential vulnerability. Within 60 days, treasury platforms (Mercury, Brex Treasury, Meow) saw deposits triple as startups diversified.
Roku SVB Exposure
$487M (26% of cash)
Roblox SVB Exposure
~$150M
Startups with 100% SVB Concentration
Hundreds
Deposit Migration to Diversified Platforms (60 days)
3x+
The cost of treasury diversification (modest operational overhead) is trivially small compared to the cost of single-bank failure (existential). Pay the small cost in advance โ don't wait for the crisis.
Decision scenario
The Post-Series-B Treasury Setup
You're CFO of a SaaS company that just closed a $50M Series B. Cash position: $65M total ($50M new + $15M existing). Monthly burn: $1.8M. Currently: 100% of cash at one regional bank earning 0.3%, no written treasury policy, no FX hedging despite 25% of revenue in EUR. Board has asked for a treasury proposal.
Total Cash
$65M
Monthly Burn
$1.8M
Runway
36 months
Bank Concentration
100% at one bank
Current Yield
0.3%
EUR Revenue Share
25%
Decision 1
You're proposing a tiered treasury structure to the board. Tier 1: $6M operational at primary bank (~3 months expenses, 0.5% yield). Tier 2: $20M in money market fund (4.7% yield, 1-day liquidity). Tier 3: $39M in laddered T-Bills (5.1% yield). Diversification: primary bank + Mercury/Brex sweep (covering 100+ FDIC banks). Plus FX hedging on EUR exposure. Total annual yield ~$2.95M vs. current $195K. The CEO worries 'this looks like financial engineering instead of running the company.'
Defer to the CEO โ keep cash at one bank, focus on the business, revisit treasury in 12 monthsReveal
Present the tiered structure with concrete numbers (yield gain = 1.5+ months of runway extension; concentration risk reduction = SVB-scenario survivable). Frame as 'extending runway through treasury optimization, not financial engineering.'โ OptimalReveal
Related concepts
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Turn Treasury Strategy into a live operating decision.
Use Treasury Strategy as the framing layer, then move into diagnostics or advisory if this maps directly to a current business bottleneck.