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How my Startup Will Make $1 Million a Year Doing Nothing

I know you don’t care about “treasury management”. Or maybe you don’t even know what it means.
Chris Hladczuk
Dec 07, 2022
3 minute read
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I know you don’t care about “treasury management”.

Or maybe you don’t even know what it means.

Because VC dollars used to be cheap

Free money that got wired to you whenever you said the magic word: 

“Please”

Well the party is over. 

You're worried about runway because your business is burning cash.

And have no clue when the economy will fall apart..

Let’s show how we put our cash to work.

Right now, we have over $25 million in the bank at Meow. 

And we will make $1 million a year by doing absolutely nothing.  

How? 

Let me show you with one simple step.

US Government Treasury Bills

Treasury Bills are beautifully boring and backed by the “full faith and credit” of the United States Government.

And that’s why we will park most of our money split across 1-month, 6-month, and 12-month maturities treasury bills.

Meow helps power a treasury bills offering that is…

  • Custodied at BNY Mellon

  • 1 business day withdrawals

  • SIPC protected (up to $500K)

And pays up to 4.69%

Your alternative? 

Grappling with TreasuryDirect.gov:

So here’s what we’ve done:

Put $2 million in 1-month treasury bills. 

And split $20 million equally between 6-month and 12-month treasuries with 4.54% and 4.69% yields respectively.

That’s $22 million backed by the full faith and credit of the US Government.

You may be thinking… 

Why did no one do this before?

Because for most of the last decade, a 12-month treasury bill gave you 0.1% interest.

Which made treasury management meaningless for most.

But ~4.7% interest (or 47x from that 0.1%) makes it matter!

On $22 million, we will earn over $1 million.

This can be used to meaningfully extend our runway or hire more A+ team members!

Wrapping Up

For the last decade, no one cared about treasury management. 

And we get it. 

Why would you when you could only earn 0.1% interest?

But now every dollar matters.

An extra $1 million provides ultimate flexibility. It provides durability to weather any economic storm.

Because Meow isn’t going anywhere. 

And we want to make sure you aren’t either.


Disclaimer:
The information provided is illustrative or for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy, sell or hold any security. The information is as of the date indicated and may change at any time without notice. Forecasts or projections of investment outcomes are estimates only and as such they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future investment results. Meow is not an investment adviser however we’ve partnered with Helium Advisors LLC (“Helium”), an SEC-registered investment adviser, to bring you certain investing features. All investment advisory services are provided by Helium. We are not affiliated with Helium however we receive compensation as a percentage of assets managed by Helium for promoting Helium’s investment advisory services. Our partnership with Helium gives us an incentive to refer you to Helium instead of another investment adviser that is not a partner of ours. This conflict of interest affects our ability to provide you with unbiased, objective information about the services of Helium. This could mean that the services of another investment adviser with whom we are not partnered may be more appropriate for you than those of Helium. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time. Helium accounts are not bank guaranteed or FDIC insured.
Written by
Chris Hladczuk
Chris HladczukDec 07, 2022
@chrishlad
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Written by
Chris Hladczuk
Chris HladczukDec 07, 2022
@chrishlad
Subscribe to our blog
Share this article
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*Meow is a financial technologies company, not a bank. The information provided is illustrative or for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy, sell or hold any security. The information is as of the date indicated and may change at any time without notice. Forecasts or projections of investment outcomes are estimates only and as such they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future investment results. Meow is not an investment adviser however we’ve partnered with Helium Advisors LLC (“Helium”), an SEC-registered investment adviser, to bring you certain investing features. All investment advisory services are provided by Helium. We are not affiliated with Helium however we receive compensation as a percentage of assets managed by Helium for promoting Helium’s investment advisory services. Our partnership with Helium gives us an incentive to refer you to Helium instead of another investment adviser that is not a partner of ours. This conflict of interest affects our ability to provide you with unbiased, objective information about the services of Helium. This could mean that the services of another investment adviser with whom we are not partnered may be more appropriate for you than those of Helium. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time. Helium accounts are not bank guaranteed or FDIC insured. 0.10% is sourced from treasury.gov's December 2020 52 week coupon equivalent yield. 4.6% is sourced from treasury.gov December 2022 52 week coupon equivalent rate yield. $460,000 calculated assuming treasury.gov's December 2022 52 week coupon equivalent yield based upon a $10 million deposit and held to maturity. Projected and/or hypothetical performance is intended to show only an expected range of possible investment outcomes based on historical average returns and standard deviation of each investment type contained in the investment mix recommended by Helium, but does not take into consideration the effect of taxes, changing risk profiles, or future investment decisions. Projected and/or hypothetical performance does not represent actual client accounts or actual trades and may not reflect the effect of material economic and market factors.
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