The InterPrime Blog

How to use Treasury Bills to Protect your Money

Everyone wants a no risk investment with guaranteed return. Unfortunately they don't exist. But there is something that gets you close.‍Treasury Bills (T-bills) from the US government tick the boxes of safety and return. The key is to understand them and know when to use them.‍This post will explain T-bills and then give you an example of how to put them into action. 

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What does it mean for the U.S. Fed to taper?

In this post we will discuss what it means to the real economy when the U.S. Fed starts tapering the pace of their asset purchases, and eventually stop them.

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Using Bond Ladders to put your idle cash to work

The tools and strategies to grow the money you have move along a risk spectrum.. On one side are speculative high risk where you hunt for home runs. On the other side are conservative slow grinders with reduced risk and potential for consistent profits. Neither is better than the other. You only need to understand the risk and potential outcome going into it.This post will explain one of the more conservative strategies that can create cash flow and income. It is called a bond ladder and it can be used by companies and individuals.

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What Everyone Ought to Know About Leverage

Everyone wants to grow their nest egg. The easiest way to do that is through compounding of gains over time. Unfortunately, most of us don’t have the patience to follow that plan. Luckily, finance wizards created leverage.This post will explain leverage, common uses, and keys to using it. Be warned - leverage is a mighty tool. It can speed up money pile growth, or it can wipe you out completely. With great power comes great responsibility!

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When money is cheap, corporations borrow!

There is always chatter about how money is cheap and big companies can borrow huge amounts at low interest rates. This post will provide insight into how much “cheap money” is really there, who is able to take advantage of it, and how they benefit and put it to use.

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Stablecoins - Will Dollars Go Digital?

Stablecoins were created to bridge the gap between digital crypto currencies/assets and real world assets. The thinking is this - if crypto assets are built with the backing of real world assets there could be a reduction or removal of price volatility.‍A reduction of price volatility will then make them more attractive to everyday people. In turn, making them more accepted for payments and storing value.‍Let’s be honest - if your buying power can move 50% higher or lower at any given time. It’s likely you won't keep a large part of your net worth in that asset.

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How the bond yield curve moves the markets

The finance industry is littered with buzzwords and jargon. Because of that ”normal folks” can feel overwhelmed and hesitant to take advantage of the opportunities that abound.‍One of the things we pride ourselves on is breaking down cryptic financial jargon, so everyone can understand and move confidently.‍In this post we are going to tackle the yield curve. Our hope is that when you finish reading this post. You will have an idea of what it tells you about the economy and financial markets. 

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What Coinbase does with their corporate cash

Coinbase is synonymous with Crypto, and they are “The trusted venue for crypto trading and custody”. Today we are going to review the financials and learn what they do with their cash and crypto - how much do they have, which cryptos they hold, and where they keep them!

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How to Educate Your VCs on Cash Management Best Practices

In this post we will share a framework that will allow you (Founders) to educate your investors on Cash Management Best Practices. We arm you with the information and tools in order to get an investment policy approved by your board, so that your cash is safe, liquid & earning market rates of return. No one wants their "cash" languishing in bank checking accounts!

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What is the real cost of "sitting on cash"?

You worked hard for your money. It doesn’t matter if your cash came from raising a round, or because you are cash flow positive. The fact is, it’s critical for you and your business. With something so important as your cash. You need to understand the cost of NOT putting it to work. Sure, knowing you have it in the checking account provides a sliver of safety and comfort. But do you know you can actually have a negative return by leaving it there? We will walk through how you can battle the specter of inflation with your cash, and make the most of the tools at our disposal.

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Four things to do as soon as you close your funding round

Raising money for your company is no easy task. You might as well compare it to climbing Mt. Everest. It takes vision, planning and grit to make it to the summit.When you finally close your funding round the weight off your shoulders is a sweet taste of victory. Not only do you believe in the vision of your company, investors do as well! The cash they are giving you is their sign of support for your mission.Once the wires start hitting your bank account it is time to put your growth plan in motion. You should already have the pieces in place to hit the gas pedal. But often founders get so heads down on raising capital, it can take some effort to shift the gears and go back to building.In this post we are going to outline steps to help with the transition from fundraising back to building.

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How real estate investors can increase return and cash flow: Cost Segregation

Today we have Jacob from Rixon & Associates sharing a strategy that can help Real Estate investors improve returns and cash flow - thank you Jacob!‍A cost-segregation study is a strategic planning tool that commercial and investment real estate owners can use to increase their cash flow, improve their tax position and improve their overall after-tax return on investment.

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A Startup Founder's Guide to being your own CFO

Andi Ruda the Founder & CEO of Rainbow CFO gives insight on how startups can bootstrap and automate their finance function early on, and then provides guidance on how to bring in external experts. Andi also shares tips and practices you can adopt to ensure your company is on track towards growth, profitability and liquidity without spending a lot of money.

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Crowdfunding - Invest like a Venture Capitalist

Did you ever see a company and think - wow that is an incredible business, I wish I was a part of it? I certainly have and unfortunately the only ways to be a part of it was by working there or investing in it.Getting a job at a fast growing company doing amazing things is hard enough. But being able to invest early in the company journey is even more difficult.Funding potentially groundbreaking companies is usually reserved for the ultra wealthy or for venture capitalists. That is until crowdfunding came along opening the door to average investors.In this post I am going to explain what crowdfunding is and educate you on how you can use it effectively.

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The Bond Market - The Market that moves all markets

The bond market is the global marketplace to buy and sell debt securities. You may also hear it called the fixed income market, credit market or debt market. This note is going to speak about the relationship between bonds and all other markets. The goal is to give you a better understanding of how bonds decide much of what happens in the finance world.

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There is No Free Lunch: A look at bond yields

Investing is hard. Anyone telling you different is a huckster. If investing was so easy, we would all be billionaires. Google "world's greatest investors" and you will see the same lists of 20 or so people. In a world with billions of people and hundreds of years of potential investors, that list is pretty darn short. That leads me to ask: Why are there so few great investors? This post will explore the connection between risk and potential returns. It will also outline a few handy steps to help you chase the investing greats.

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Liquidity - Why you may not have as much as you think

It's all about liquidity. With it you have a fighting chance. Without it you are on course to ruin. In this post we are going to speak about liquidity from the perspective of an investor and a business. The stories will give you a clear idea of when and why liquidity matters.

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Why Tesla, Square & MicroStrategy Bought Bitcoin (and why you probably shouldn't)

In the last few months companies that are household names (Tesla, Square) have bought Bitcoin(BTC) with their treasury capital. Another company, MicroStrategy, has made headlines by putting over 90% of their treasury assets into Bitcoin. What may seem like a smart move for them may not translate into a good one for your company. In this post we explore the motivations behind these BTC buys and why it makes sense for them. Hint: They are not speculating, and have been quite targeted in their decision-making.

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Give me 5 minutes - I'll teach you about short term bond funds

What flavor of bonds do you like? The answer to that question depends on your goals. Are you focused on owning specific types of bonds like corporates? Are you more focused on safety and look to governments? The key is always to know what your goal(s) are and which bonds may accomplish them. In this post we are going to talk about short term bond funds. Highlighting key things for you to know when exploring them.

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Guest Post: Live or Die by your KPIs

Trust is critical within organizations and should be table stakes amongst leadership teams. Everyone is motivated and incentivized to drive the company towards the same common goal. Despite the trust and confidence we have in one another, we have a fiduciary responsibility to the companies we serve.

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What everyone ought to know about raising equity

Aaron Spool at Eventus Advisory Group wrote an article titled “The Hidden Costs of Equity” discussing these costs. We are going to expand on his article in this post. The hope is to help founders better prepare for the long and often costly business journey.

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Risk: Manage it now or you will hate yourself later

In this post we will define "risk", review how to estimate & define the level of risk that you are comfortable with and then show you how to track & manage it. Risk has long been "scary", but once you understand it you will be able to use it to your advantage.

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Guest post: When and Why to change your bank

Today we have Gary Hewamadduma, the CEO of CFO Plans who shares with us his insight on how to evaluate your banking relationships and what to look for when picking a new one. He highlights the key areas on which to focus and how to optimize your setup so that you are able to get the best service, have maximum control on your funds and have the critical financial support when you need it most.

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Guest Post: Navigating the Gauntlet; Leveraging an Outsourced CFO

For small and growing businesses, the ability to find, retain and afford the required skills to navigate a paradigm shift can be out of reach. Leveraging a fractional or part-time CFO is a viable and sustainable solution. In many cases it can be the optimal solution for managing and growing a business in a challenging or dynamic environment. Tina Gregory from Early Growth highlights the benefits of a Outsourced CFO with operational expertise, shares the job description of the CFO you want and gives tips on how to go about selecting a CFO to suit your business.

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Airbnb, DoorDash & Zoom - Analyzing their corporate cash portfolios

We have had a flurry of market activity this month along with the announcement of the most anticipated IPOs of year - Airbnb & DoorDash. We wanted to take this opportunity to analyze the corporate cash portfolios of these iconic companies while the news was fresh off the press! Zoom, Airbnb & DoorDash are very different companies, but you will see that a lot of the strategies they use to manage their corporate cash & keep it safe, liquid and earning a reasonable rate of return are quite similar.

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Snowflakes in September - An analysis of Snowflake's corporate cash

Snowflake IPO'd as the hottest new company to come public in 2020. Let’s dig into Snowflake’s S-1 to see how they manage their corporate cash. If you are a founder, CFO, or manage your company’s corporate cash, take note. The lessons here are applicable to companies of all sizes. Before IPO Snowflake had $886.8mm in “cash” on their balance sheet. Did they keep all that in a Bank of America checking account? Of course not. They know once you have more than $250k in a single bank account, you lose FDIC insurance protection. Instead, they focussed on maximizing the safety & security of their cash by investing it and earning a reasonable rate of return on their capital.

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Curtain closing on Prime Money Market Funds?

In this post, we are going to do a deep dive into prime money market funds, since there has been an increase in news about them recently. A prime fund has the same mutual fund operating structure as all other money market funds, but the assets they are permitted to invest in are slightly different.Like many other funds, Prime funds largely hold US Treasuries and US Government debt, but they also have the unique ability to invest in corporate credit instruments. These include Bank CD’s, commercial paper, corporate bonds, and USD-denominated foreign debt issued by governments and corporations.The ability to invest in these additional assets allows them to offer investors higher yields.

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Guest post: You got the funding! Now learn how to manage your cash from the CFO of a $12.5B bank

Looking at how banks manage their money and balance sheets as well as their investment policy statements provides insights on what to do with all that cash you just raised. ‍Before starting TSG and providing interim CFO services to early growth companies, I served as CFO of a $12.5 billion bank. The experience is valuable because one of the first issues I often address in advising early stage companies is what to do with the cash from the most recent funding round considering the projected burn rate and liquidity needs.

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Introducing SIPS - The Standard Investment Policy for Startups

After managing money for startups of all sizes over the last few years at InterPrime, we have developed a keen understanding of their cash management needs. We’ve distilled that knowledge into a standardized set of rules and guidelines, the Standard Investment Policy for Startups (SIPS), which we’re open-sourcing today. You can implement SIPS immediately to start investing your business’s money safely and responsibly.

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Don’t Blow Your VC’s Money

Many businesses don’t have a plan for managing their corporate cash beyond putting their money in the bank and checking the balance once in a while. But all businesses, no matter how much money they have or what stage they are at, could benefit greatly from a solid and well-defined corporate cash management strategy. Effective cash management means greater security, liquidity and returns on your cash, which will help your business succeed. In this post, we’ll break down what cash management is and show you how to develop an effective cash management strategy for your business.

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Setting Up Your Corporate Banking & Treasury Strategy

A question we often hear is “Is my corporate banking & treasury strategy set up correctly, and if not, what do you suggest we change?” In this post, we’ll show you how to answer that question for yourself and go over a few recommended banking and treasury management setups for different types of businesses that you can use as a starting point

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Bonds – A Primer (part 4) - The Corporate Bond Market

In this post we are going to review the Corporate Bond Market, one of the largest and most structurally important markets in our modern financial world. This is where corporations from all over the world go to “Borrow Money” in order to finance their capital needs and operations. As of May 2020, the Corporate Bond market was over $9.5 Trillion having doubled in size in the last 5 years (Sifma.org).

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Bonds – A Primer (part 3) - The Government Bond Market

Since the prestiti in Venice started it all, governments have continued to use bonds more and more aggressively over the years in order to fund all sorts of endeavors. These bonds are typically backed by capital raised by taxing their citizens.

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Bonds – A Primer (part 2) – Fixed Income History and Overview

In this post, we will delve into the history of fixed income and discover how modern day fixed income markets came to be. Then, we will give an overview of the basic mechanics and terminology of bonds and other fixed income instruments

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Bonds - A Primer (Part 1) - Introduction

In this series of posts, we will cover bonds and debt securities from the ground up. We’ll discuss the history, the basic mechanics of bonds, and go into detail on specific types of assets. We hope to leave you with a better understanding of how bonds and fixed income work and how you can leverage...

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Where Has All The Yield Gone?

Everyone’s #1 goal is to keep their corporate cash safe, but in 2020 you get little to no yield on those assets. Your bank is likely showing you a rate hovering around 1%, but is that truly the return you will receive? Corporate asset managers...

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Are Money Market Funds the Safest Port in a Rough Financial Ocean?

Know what you are buying before you commit your capital Financial markets can resemble a turbulent ocean, especially so right now! Having a safe harbor, and knowing when to use it, is critical to maintaining financial health. There are many such tools available to you for managing your short term cash. In this post, we...

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