Cash Management & Responsible Banking Practices

Cash Management & Responsible Banking Practices

Admin & Finance

A sudden reminder

The recent collapses of SVB, Silverlake, and Crédit Suisse have once again hammered home the importance of establishing reliable and disaster ready cash management policy for your company. There is no better time than the present to prepare solid contingencies and to know where your money is and how to access it at all times.

The following best practices and recommendations are valid for all companies, and especially pertinent if you have recently received new funds from your investors.

Let your investors or the Startup Success team know how you manage your money and what banks you use.

1. Diversify Institutional Risk

Mitigate risk by maintaining accounts across 2-3 institutions at all times. At least one should be a Global Systematically Important Bank (G-SIB), like JP Morgan, Société Générale, Deutsche Bank. The extra logistical effort is worth it. Take care to maintain an updated reporting of what each account is used for and their respective balances. In the event of a crisis, this will enable you to react more quickly.

👉 Example: Manage payroll from account X, customer payments from Y, and pay your office rent from Z.
WARNING: Be aware that many neobanks and financial service companies (Qonto, Shine, Brex, etc.) don't provide access to short-term credit, nor do they offer access to government backed loans. In France, during COVID, customers of neobanks were unable to obtain government backed emergency funds leaving them in a tricky situation

2. Split Cash Allocations Based On Duration and Use

There's no benefit to keeping all your eggs in one basket. Manage your money based upon your runway and monthly cash burn. Make the most of financial service providers like Qonto, Shine, or Brex for your day-to-day cashflow, while maintaining a strong relationship with traditional banking institutions for your long-term holdings.

Ensure you maintain at least equivalent of 3-months salary in accounts protected by deposit guarantees (FDIC in the United States, FGDR in France, Deposit Guarentee Act in Germany). These guarantees are either per account, or per institution. In order to ensure maximum coverage, you may need to separate funds across several account/instituions.

2022 Treasury management Guide by a16z
2022 Treasury management Guide by a16z

Short-Term Cash

For their ease-of-use, modern interfaces, and their ability to be interconnected with your other systems, financial services providers including Qonto (France & Germany) or Brex (United States) are ideal for holding cash short-term.

Long-Term Cash & Investments

Wherever possible, consider investing "excess cash" that you don't need in the near-term in safe, liquid options to generate additional income. Term limited savings accounts are a great option that maintain your access to funds in an emergency.

3. Fraud Prevention

The moment you announce your fundraising round, you become an attractive target for bad actors who now know you are cash-rich.

Create a process to prevent fraud

Implement a process of approvals and verification for meaningful money movements, tiered based on the amount. We recommend at a minimum implementing the "four eyes" principle of approvals (via phone or in person) and lowering the bar for larger wire approvals from the CEO and possibly the board. Any changes to payment instructions must be verified through multiple channels.

👉 Example: if you pay the monthly legal bill into a specific account and receive a letter asking to change the account, please verify. Changes such as this are typically a red flag. To verify, call numbers on the corporate website, not those listed on correspondence.

4. Ensure there are no single points of failure

Implement redundancies in approval processes. Ensure that one individual doesn’t become a bottleneck in the process. Add multiple signatories on key accounts and establish solid internal policies about what to do in emergencies.

👉 Example: Imagine if your CEO is unreachable for several days, and they’re the only one able to make an urgent payment to one of your key service providers. Try to avoid situations where one single person (who could get sick, or go on holiday) has the only access to your critical infrastructure and cashflow.

5. Checklist for Selecting a New Banking Partner

Consider the following aspects when selecting a new bank

Location (e.g., US, EU, emerging markets)
Regulations surrounding that bank (differ based on assets / $ in deposits and regulatory agency)
VC / startup-friendliness (e.g., venture debt / credit lines, financial advising services)
Account structure (e.g., fees, minimum account balance)
Customer service (e.g., do things move digitally and quickly?, is the platform user-friendly? are you able to automate certain tasks? is there an accessible API? )
Will you have a personal account manager you can reach in an emergency?
Dan you make international transfers from the web/mobile app? What about batch payments?
Access to debit cards for team members + executives
Synchronisation with your accounting software

Unsure of the solidity of the bank? Ask these questions…

Are deposits growing steadily?
How much of my deposits are guaranteed? (FDIC, FGDR, etc.)
Is the Tier 1 leverage ratio > 8%?*
Is the loan-to-deposit ratio < 90%?
How do they compare to direct competitors?
Have Central Banks, etc. taken corrective actions?

*The Tier 1 leverage ratio is frequently used by regulators to ensure the capital adequacy of banks and to place constraints on the degree to which a financial company can leverage its capital base.

Preferred Bank Contacts


Neobanks & Financial Services Companies

Memo Bank Maxime Bana Account Executive


Thomas Bourlot Pôle Innovation 06 63 46 11 82 Maxime Andrieux Chargé d’affaires entreprises 06 76 93 50 22

Hugo Labbé

Chargé d’Affaires Entreprises Innovantes

06 63 95 47 00

Sophie Magné Responsable du Marché Entreprises Innovantes et Start-up Thierry Maurer Directeur du centre d’affaires innovation

Pierre Pradayrol

Directeur Filière entrepreneurs chez Caisse d'Epargne Ile-de-France

Idris Hedaraly Directeur Centre d'Affaires Tech
Nizar Dahmane Head of Tech Business Unit - La Banque Postale CIB

🇺🇸United States

Neobanks/Payment Services Providers

Wise Wise offers international payment services, business banking and card management for teams.
Brex Brex offers business credit cards and cash management accounts to technology companies.


JP Morgan AJ Lindblom Corporate Client Banking
First Republic Iyvin Benjamin Senior Preferred Banker

🇩🇪Germany (In progress)

Neobanks/Payment Services Providers


Traditional Banks

Deutsche Bank