As funding rounds become increasingly cautious and rate environments more volatile, bootstrapped and angel-funded startups are adopting a prudent treasury strategy: shifting portions of their idle cash into short-term U.S. Treasury bills. By investing in 3‑month and 6‑month T‑bills yielding around 4%, these companies protect their capital, maintain liquidity, and effectively prolong their financial runway.
Unlike leaving funds in low-yield checking or money-market accounts, T‑bills offer a guaranteed return. Yields on 3‑month bills have hovered around 4.3–4.4%, and 6‑month bills about 4.3% as of mid‑July 2025. These returns outperform most traditional balances without sacrificing safety or access to funds.
Most startups follow a “T‑bill ladder” model—investing in bills of varying maturities. This ensures they can tap into a portion of their reserves every few months, matching liquidity to operational needs. Short-term government securities are widely treated as cash equivalents. They can be included in runway calculations and are often viewed favorably by potential backers during diligence.
Founders and CFOs increasingly realize that holding idle cash in zero-return accounts diminishes runway. Treasury management has transitioned from a “waste of time” to an “existential need,” as T‑bill coupon rates surged close to 5% in past cycles. Fintech providers like Round Treasury have emerged to fill this need. They automate treasury allocation—sweeping idle funds into government-backed instruments and offering yields of up to 5%, while retaining next-day liquidity. Such platforms remove friction, making treasury optimization as easy as setting and forgetting.
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For every $1 million parked in 4% T-bills, startups earn approximately $40,000 annually—funds that can support monthly expenses, hires, or operational buffers. Over time, such returns can extend runway by months without additional funding. Scheduled maturities mean startups can forecast when capital becomes available—helping align funding with milestones or hiring plans, reducing last-minute emergency fund requests. Demonstrating disciplined cash management—holding liquid, yield-earning assets—can enhance credibility during due diligence and signal fiscal responsibility to potential investors.
Accounting managers classify T‑bills as cash equivalents or short-term investments. This boosts reported liquidity and runway—all without impacting burn calculations. While highly liquid, early redemption of T‑bills can result in small principal losses. That is why most startups avoid pre-maturing bills unless essential, opting instead for planned maturity schedules. Startups are using tools from fintechs or modern banking platforms to automatically sweep excess cash into structured T‑bill ladders—reducing operational workload and aligning investments with cash flow needs.
The rise of T‑bill allocation is part of a larger development—software-first financial platforms are democratizing corporate treasury capabilities once exclusive to large corporates. Startups can now easily deploy tools for monitoring burn rate, automating sweeps, and modeling runway—all within their banking stack. This shift aligns with current macro conditions: as the U.S. Federal Reserve maintains tight monetary policy, T‑bill yields have settled at attractive levels. The 3‑month rate stands around 4.34%, while the 6‑month rate is roughly 4.30%, both well above pre-pandemic norms.
Startup leaders are increasingly taking a methodical approach to managing cash. They assess runway needs, determine monthly burn, and segment liquidity accordingly. Funds are distributed across various maturities so capital becomes regularly available without penalty. Fintech tools automate these steps, streamlining oversight. Regular performance reviews and adjustments to ladder strategies allow startups to stay aligned with market trends. Founders also present these practices in board updates, reinforcing investor trust and transparency.
In an era where startup valuations and financing can hinge on perception as much as performance, allocating idle funds into short-term T‑bills is a low-risk strategy that drives meaningful returns. Yields at 4%—secure, liquid, and easy to manage—are helping startups from bootstrapped projects to angel-backed ventures stretch their runway, fund growth initiatives, and build credibility.
This shift signals that startup finance is maturing—where traditional cash balances no longer suffice, treasury strategy becomes a strategic advantage. As this practice standardizes, founders who embrace disciplined cash management will better survive lean funding cycles and stand out in investor evaluations.
