Bottom line up front: a startup treasury policy (also called an Investment Policy Statement, or IPS) is a short written document that says where your company’s cash is allowed to live, who is allowed to move it, and how much yield-chasing risk you will accept. After SVB, boards started asking for one, and most founders have nothing to hand over. This page explains what an IPS actually is, the components that matter, and gives you a copy-pasteable template you can adapt in an afternoon. This is the document that turns “trust me, the money’s fine” into something a board and an auditor can sign off on.

A treasury policy is not corporate theater. It is the thing that would have limited the damage for a lot of companies in March 2023.

From running cash operations, here is why I think a one-page IPS is the highest-leverage hour a founder without a CFO can spend. When you move money for a living, the difference between a clean day and a bad one is almost never brilliance in the moment. It is whether the rules were written down before you needed them. An IPS is just that: the decisions about where cash can sit, who can move it, and how much yield risk is allowed, made once, on a calm day, instead of improvised under pressure during the next bank scare. It does not need to be long. It needs to exist, so that the answer to “is our money safe” is a document you can hand over rather than a scramble.

What a treasury policy actually is

An Investment Policy Statement answers three questions in writing:

1. Safety: where is our cash allowed to be held, and how do we protect principal?
2. Liquidity: how much must be instantly available, and how much can be tied up for yield?
3. Yield: what return are we willing to reach for, and what risk are we explicitly not willing to take to get it?

Notice the order. For an operating company burning venture capital, the priority is always safety, then liquidity, then yield (“SLY”). A startup is not a hedge fund. The job of the treasury is to make sure payroll clears and runway is protected, not to generate investment income. Any policy that inverts that order is a policy that will eventually cost you your runway.

Why a funded startup needs one

• The board will ask. Post-SVB, deposit safety is a standing board and investor concern. An IPS is the artifact that answers it once, instead of in a panicked Slack thread during the next bank scare.
• It forces the concentration conversation. Writing the policy is what surfaces “wait, all $6M is at one bank.” See FDIC insurance for startup cash for why that matters.
• It prevents the yield-chasing mistake. Without a written approved-instrument list, someone eventually parks runway in something that is not as safe as they think. The policy is the guardrail.
• It survives personnel changes. The controller who set up the accounts leaves. The policy is what tells the next person the rules.
• Auditors and diligence like it. In a future raise or acquisition, “here is our board-approved treasury policy” is a small but real signal of operational maturity.

The components that actually matter

A good startup IPS is one to two pages. These are the sections that carry weight.

1. Objectives and priority order. State SLY explicitly: safety first, liquidity second, yield third.

2. The cash-segmentation model. Split cash into buckets by when you need it. The practitioner default:

• Operating cash (roughly 1-3 months of burn): fully liquid, in checking.
• Reserve cash (several months of runway): FDIC-insured, spread across banks via a sweep network.
• Strategic / invested cash (runway you will not touch for quarters): in approved investment instruments for yield.

3. Eligible (approved) investments. The heart of the policy. An explicit list of what cash is allowed to be held in, and by implication, what it is not.

My own bias here is deliberately boring, and I think that is the correct bias for runway. The primary tool I would reach for is an overnight money market fund through the primary bank. That is about as far out on the risk curve as I would go with money that has to be there when payroll clears. Direct U.S. Treasury bills belong on the list. Government money market funds belong on it, with the condition that they actually hold government securities and repo, not a “government” label stretched over something riskier. Everything that trades a little more principal safety for a few extra basis points comes off: no equities or stock market exposure, no crypto, no prime money market funds, no corporate bonds, nothing with credit risk or a real duration bet. Runway is not the place to chase yield. The point of this bucket is that the money is still there and still liquid on the worst possible morning, not that it earned an extra half point. If an instrument can lose principal or gate redemptions when markets get ugly, it does not belong anywhere near operating runway.

4. Concentration and counterparty limits. How much can sit at any one bank, the minimum number of banks, and per-issuer limits on investments.

Here is where I will push back on the reflexive “diversify from day one” advice, then reconcile it. In the earliest days, a single banking relationship is likely the right call. Simplicity is a feature when the team is small: one relationship means treasury does not become a roadblock and operations stay frictionless. Standing up three institutions before you have the people or the cash to manage them just adds drag. The move is to match banking complexity to stage. Start with one clean relationship. Add a second banking partner in the later funding rounds, once the operating cash position is substantial enough that concentration actually matters and you have the time and team to run more than one relationship well. Done that way you are not diversified on day one, but you are diversified by the time the balance is large enough for it to count, which is the whole point of the SVB lesson.

To be clear about the counterargument: the mainstream post-SVB advice is now two institutions from day one, and many VC term sheets require it. I am not disputing that a funded startup needs a real backup, I am arguing about timing and weighting. If you are holding a meaningful raise, open the second relationship now, not later. The single-bank-early call only applies while balances are genuinely small and fully swept and insured. And when you do add that second relationship, make sure it is an actually unrelated institution: two fintechs riding the same partner bank, or two accounts inside the same sweep network, is one point of failure wearing two logos. Find out which bank actually holds your deposits behind a neobank before you count it as a second leg.

On the numbers founders always want: once you are genuinely running two institutions, keep each one meaningfully funded and active rather than leaving a token account that is not wired into real operations, because a dormant second relationship does not actually give you anywhere to divert to in a crisis. I would not hand you a false-precision “no more than X% at any one bank” rule, because the right split depends on your burn, your balance, and how your operations are wired. Set the principle in your policy, use the bracketed placeholder in the template below, and pick the specific figure with your board against your actual numbers.

5. Liquidity requirements. A hard floor of instantly-available cash (often expressed as X months of operating expenses that must never be locked up).

6. Authority and controls. Who can initiate a transfer, who must approve it, the dollar thresholds that trigger a second signer, and what requires board approval.

From the cash-operations side, the control that actually stops a bad wire is separation, not paperwork. Dual control on every outbound wire, meaning the person who initiates it cannot also be the person who releases it, is the single rule that catches both the honest mistake and the social-engineering attack, because the fraud only works if one person can push money out alone. Pair that with a dollar threshold above which a second approver is mandatory, and a hard rule that any new payee or changed bank detail gets verified out of band, a callback to a known number, before the first dollar moves. That last one matters more than people expect: most real losses I have seen in high-volume payment operations are not exotic, they are a changed set of wire instructions that nobody called to confirm. The controls that only look good on paper are the ones a single motivated person can satisfy end to end. If your matrix lets one login originate and approve the same wire, you do not really have a control, you have a formality.

7. Reporting and review. How often the policy is reviewed (at least annually, plus after any material event) and what treasury reporting goes to the board.

The failure mode nobody warns you about

The most common way a startup treasury policy fails is not that it is badly written. It is that it gets written once, approved, filed, and never actually followed. Six months later the operating account has drifted back to a single bank and the approved-instrument list is a document nobody has opened.

The fix comes straight from how reconciliation works in daily cash operations: a policy stays live only if something forces you to check reality against it on a set cadence. My habit would be a quarterly reconciliation of the actual treasury position against the policy, balances by bank, insured versus uninsured, what is sitting in which instrument, put next to what the policy says is allowed. Make it a standing line item in the board deck so it cannot quietly get skipped. That single recurring check is what catches the operating account that has drifted back to one bank, or the instrument that crept onto the list without approval, while the drift is small and cheap to fix. A policy nobody reconciles against is not a policy, it is a filed document. The reconciliation is what turns it into a practice.

The template

Copy this, fill the brackets, take it to your next board meeting. It is deliberately short, because a policy nobody reads protects nobody.

# [COMPANY NAME]: Treasury & Investment Policy Statement
Version: 1.0   |   Adopted: [DATE]   |   Approved by: Board of Directors
Owner: [NAME/TITLE, e.g., CEO / Head of Finance]   |   Next review: [DATE, ≤12 months]

## 1. Purpose
This policy governs the management of [COMPANY NAME]'s corporate cash and
investments. Its objectives, in strict priority order, are:
  1. SAFETY of principal
  2. LIQUIDITY sufficient to meet all operating obligations
  3. YIELD, only after safety and liquidity are satisfied
This company does not manage its cash to generate investment income. Capital
preservation and runway protection take precedence over return in every case.

## 2. Cash Segmentation
Corporate cash is divided into three tiers:
  - OPERATING CASH: target [1-3] months of operating expenses. Held in
    checking for immediate liquidity.
  - RESERVE CASH: the next [X] months of runway. Held in FDIC-insured
    deposits, distributed via a sweep network so that no funds sit uninsured.
  - STRATEGIC CASH: runway not expected to be needed within [X] months. May be
    held in Eligible Investments (Section 4) for yield.

## 3. Deposit Safety & Counterparty Limits
  - No more than $250,000 of uninsured deposit exposure at any single bank
    outside of a qualifying FDIC sweep arrangement.
  - Reserve cash must be held such that FDIC insurance covers [target %,
    e.g., 100%] of the balance (via IntraFi ICS / equivalent sweep network).
  - Minimum of [N] separate banking relationships for balances above
    $[THRESHOLD].
  - Approved banking providers: [LIST, e.g., Mercury, Rho, [primary bank]].

## 4. Eligible Investments (Strategic Cash only)
Strategic cash may ONLY be held in:
  - U.S. Treasury bills and notes with maturity ≤ [12] months
  - Government money market funds (funds holding ≥[99.5]% U.S. government
    securities / repo), held at a SIPC-member broker-dealer
  - FDIC-insured business savings / money market deposit accounts
PROHIBITED without prior Board approval: prime money market funds, corporate
bonds, equities, municipal securities, structured products, crypto assets,
any instrument with credit risk or a stated maturity > [12] months, and any
single-issuer concentration exceeding [X]% of strategic cash.

## 5. Liquidity Floor
At all times, a minimum of [X] months of operating expenses must be held in
same-day-accessible funds (operating + reserve cash). Strategic cash
maturities must be laddered so that no more than [X]% matures/redeems in any
single [30-day] window is required to meet obligations.

## 6. Authority & Controls
  - Transfers up to $[A]: initiated and approved by [ROLE].
  - Transfers above $[A]: require dual approval by [ROLE 1] and [ROLE 2].
  - All outbound wires require dual control (separate initiator and approver).
  - New payees/vendors require [verification step, e.g., callback confirmation]
    before first payment.
  - Any change to this policy, or any purchase of a Prohibited instrument,
    requires prior Board approval.

## 7. Reporting & Review
  - Treasury position (balances by bank, insured vs uninsured, yield) reported
    to the Board [quarterly].
  - This policy is reviewed at least [annually] and after any material event
    (bank instability, major raise, significant change in burn).
  - Compliance with this policy is reconciled [quarterly] by [ROLE].

Adopted by the Board of Directors of [COMPANY NAME] on [DATE].
_________________________   _________________________
[NAME], [TITLE]             [NAME], [TITLE]

Fill the brackets against your own burn and risk tolerance. If you want a second opinion on the eligible-investments and concentration sections specifically, those are the two places worth the most scrutiny, and the two this site can help you get right.

Related reading

• FDIC insurance for startup cash. The mechanics behind Section 3.
• Best high-yield account for startup runway. How to fill the Section 4 eligible-investments bucket.
• Rho vs Mercury and Mercury vs Brex vs Ramp. Choosing the providers you will name in Section 3.

The honest caveat

This template is a starting point, not legal, tax, or investment advice, and this site is a publisher, not a bank or a financial advisor. Your board, and where warranted your counsel and auditor, should approve your actual policy. FDIC and SIPC rules referenced here ($250K per depositor/bank/ownership category; SIPC $500K total/$250K cash) are current as of 2026 but can change; confirm before relying on them. The value of this page is not the boilerplate, it is the judgment about what belongs in the eligible-investments and concentration sections, which is exactly where a practitioner earns their keep.

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