How a Treasury Investment Policy Should Change From Series A to B

At Series A, most companies hold cash in one or two accounts at one bank, and a short policy statement, keep it safe, keep it liquid, is a reasonable reflection of that reality. Writing a detailed, multi-tier investment policy for a balance that fits in a single insured account is effort spent on a problem you don't have yet.

The mistake isn't having a thin policy at Series A; it's still having the same thin policy once the balance sheet has outgrown it. Say a one-paragraph statement was entirely adequate for a $2M balance held at one bank: it simply doesn't answer the questions a $20M balance raises.

A Series B raise typically pushes the cash balance well past what a single insured account can cover, which forces real decisions: concentration limits across more than one bank, a split between operating and reserve tiers, and often a first look at instruments beyond a plain deposit account, like Treasury bills or a government money market fund. The board is also more likely to include investors who've seen a portfolio company mishandle treasury before, and they'll ask sharper questions than a Series A board typically does.

This is also usually the point where the CFO role, previously handled by a founder or a controller, becomes a dedicated hire, and a dedicated policy tends to follow that hire rather than precede it. It also tends to be the point where the round itself pushes the balance well past a single insured account's coverage, which is what forces the concentration-limit conversation whether anyone planned to have it or not.

Expect the Series B update to cover these areas:

• Concentration limits across more than one bank, since the balance now exceeds what a single insured account can cover.
• A split between operating and reserve tiers, sized to your burn multiple rather than to a round number.
• A first look at instruments beyond a plain deposit account, such as Treasury bills or a government money market fund.
• Written approval thresholds with named backup approvers, replacing habits that used to live between two co-founders.
• Board or audit committee sign-off on the updated version, so a later diligence process finds evidence of review.

How much of the new round needs to stay fully liquid depends on your burn: a company with a higher burn multiple relative to its stage should keep a deeper operating buffer liquid than one that's closer to the efficient end of its stage's range, since a slower month costs it more runway¹. Anchor the tier sizes to that reality rather than an arbitrary round percentage that happened to sound reasonable in the policy meeting.

Revisit the tier sizes each time the burn multiple trend shifts meaningfully, not just at the next fundraise.

At Series A, dual-approval on large wires might exist as an unwritten habit between two co-founders. At Series B, write it down as an actual threshold with named backup approvers, because the informal version breaks the moment either founder is unreachable or the team grows past the two people who originally understood the habit.

This formalization step is often the one that gets skipped, since nothing forces it the way a new instrument or a new bank does. Put it on the same checklist as the other Series B changes so it doesn't get left behind.

A Series B policy update should go to the board or audit committee for approval, not just get filed by finance internally, since board sign-off is exactly what a later diligence process or a new board member will ask to see. A policy with no evidence of board review reads as though nobody outside finance actually checked it.

Build the sign-off into the same board meeting where the round's use of proceeds gets discussed, so treasury governance and capital allocation get reviewed together rather than as two disconnected conversations months apart.

A Series C or later diligence process will typically ask for the current treasury policy, evidence it was board-approved, and a reconciliation showing actual holdings match it. Companies that treat the Series B policy as a living document, revisited at each material change, walk into that request with a clean answer. Companies that wrote it once and never touched it usually end up explaining a gap between the document and reality in real time, during diligence, which is a worse place to discover it than during a routine internal review.