Founders in the early stage rarely think about interest rates. Savvy founders often think high interest rates are bad. Fundraising slows, valuations compress, venture capital dries up. That part is true. But if you've already raised, higher rates don't just affect investors; they affect you directly and work in your favor.

Take a simple case: you raise $4M in venture, and your burn is $100K per month.

• With rates at 0% (or in a checking account), that's 40 months of runway.
• What if you park your $4M cash in Treasuries yielding ~4.5% (as was the case in 2024 til today)?
  • Paying down your burn from the coupons first (before you eat into the principal), your runway extends to ~49 months, or about 22% more. That's nearly an extra year.
  • Even if you just draw down the principal to cover burn and treat the yield as incidental, you still end up with ~46 months.

This isn't terribly complex finance, but relatively small choices like this determine whether you have 40 months or 49 months to find product–market fit, and they have the largest effect up front, since your coupons will slowly shrink in lockstep with your principal.

If you and your cofounder are running super lean (say, $150k-$200k a year in burn) the yield alone may cover a large share of it, or even 100% of your burn. That means you have flexibility to take your time with hiring, more time before you need to raise again, and more time to make mistakes and correct them - without materially impacting the principal you just raised.

Even better, as you collect NOLs and R&D tax credits, you can offset the taxes you would need to pay from your income on the coupons.

The early game is about initial conditions - simple choices around burn rate, hiring, and cash management allows you to absorb low-magnitude mistakes and iterate without huge opportunity cost tradeoffs.

I have personally set up and used the two main startup banking providers that offer treasury products, Mercury and Rho, at my company.

Either one is a great choice, but I had a substantially better experience with Rho. Their client service is very strong and overall it is a more complete offering (banking, treasury, and cards all in one).