For VC-backed businesses, cash management isn’t just about earning the highest yield—it’s about ensuring security, maintaining liquidity, and minimising operational complexity. With fundraising timelines extending and cash runway under scrutiny, finance teams are asking:
🔹 How do we maximise returns without increasing risk?
🔹 How much cash should be kept liquid vs. allocated to higher-yielding options?
🔹 What’s the simplest way to optimise cash without adding more admin burden?
There are four key factors finance teams must consider when deciding where to allocate cash:
1. Security – Protecting capital is Priority #1.
Cash should be safe, diversified, and not exposed to unnecessary counterparty risk.
2. Liquidity – Ensuring cash is available when needed.
The ability to access funds on demand is critical for covering expenses and unforeseen costs.
3. Yield – Earning a return on idle cash.
Maximising yield matters—but should never come at the cost of security or liquidity.
4. Ease of Use – Reducing complexity in treasury management.
Finance teams juggle multiple priorities and don’t have lots of time to dedicate to treasury management
In this post, we’ll explore how VC-backed finance teams can effectively balance these four priorities while making cash work harder for their business.
The Problem: Startups leave money on the table
Your idle cash is an asset—but most startups fail to optimise it. Startups typically hold significant cash balances post-fundraise, but many default to one of three suboptimal strategies:
1. Leaving cash in low-yield bank accounts
🔻 Most business accounts offer near-zero interest (0.5% - 2%)
🔻 A company with £10M in idle cash could be losing £300K+ per year
🔻 Traditional banks prioritise lending, not optimising SME deposits
2. Manually spreading deposits across multiple banks
🔻 Some finance teams diversify cash across banks to reduce counterparty risk and increase yield
🔻 Operationally complex—requires constant tracking and fund movement
🔻 Cash fragmentation makes liquidity harder to manage
3. Locking cash in Term Deposits for higher yields
🔻 Higher rates (4-5%) but at the cost of liquidity
🔻 Breaking deposits early can incur penaltie
🔻 Ties up funds that could be used for growth
The challenge for Finance Teams is clear: How do you maximise yield without sacrificing security, liquidity, or ease of use?
The smarter approach: A cash allocation framework for finance teams
Rather than choosing between liquidity vs. yield, the best finance teams segment their cash into three categories:
This framework ensures a balance between security, liquidity, and yield—without adding complexity.
Why more finance teams are turning to Money Market Funds (MMFs)
MMFs offer the best balance of security, liquidity, and yield for reserve cash.
Security
✅ Institutional-grade diversification—exposure to multiple high-credit institutions
✅ Historically safer than uninsured bank deposits
✅ Managed by regulated financial institutions with strict risk controls
Liquidity
✅ Next-day access to cash—unlike term deposits, which require lock-ups
✅ No penalties for withdrawals—funds remain available when needed
Yield
✅ Higher returns than traditional bank accounts (currently up to 4.8%, fluctuating with base rates)
✅ Competitive with term deposits—but without sacrificing access
Ease of Use
✅ No need to manage multiple bank accounts manually
✅ Fully automated treasury management—saving finance teams time
For reserve cash, MMFs provide the best of all worlds—security, liquidity, yield, and simplicity.
How Unvested Helps Finance Teams Automate Cash Optimisation
At Unvested, we’re helping VC-backed finance teams automate cash management and access high yields without the complexity of managing multiple bank accounts.
✅ Competitive, market-leading returns (currently up to 4.8%, adjusted with base rates)
✅ No need to switch banks—we integrate with your existing setup
✅ Full liquidity—access your funds at any time
✅ AAA-rated, diversified investments—no single bank risk
✅ Seamless setup & Open Banking integrations—zero manual admin
The result? You earn more on idle cash, without locking it up or increasing complexity.
We want to hear from you!
We’re actively speaking to VC-backed founders and CFOs to better understand how they manage cash flow, optimise treasury, and balance security vs. yield.
📆 Want to share your approach? Book a 15-min call with us.
💬 Or drop us a message here - we’d love to hear how you think about cash management.
