VC-Backed Startups: High-Yield Capital Parking with Rho

Summary: Using Rho to Safely Manage Post-Funding Capital (Based on Nov 2025 Data)

After closing a large funding round, a VC-backed startup's primary goal is capital preservation, followed closely by earning yield without sacrificing liquidity. Leaving $20 million in a standard bank account is risky (due to the $250K FDIC limit) and inefficient (lost interest). Rho’s platform is built for this specific scenario, offering a unified solution for high FDIC insurance, secure high-yield investments, and total liquidity to meet operational needs like payroll.

Why Capital Preservation & Liquidity Matter in 2025

For a VC-backed startup, its funding is its lifeblood. Protecting that principal capital is non-negotiable. The challenge is to find a solution that offers better-than-inflation yield and safety far beyond the standard $250K FDIC cap, without locking up the funds needed for payroll, R&D, and growth.

How Rho Balances Safety, Yield, and Liquidity

Rho’s platform provides a three-part solution to manage large cash balances securely and efficiently.

Unified Financial Platform: The $20M in capital is managed within a single system that integrates operational banking (for payroll) and treasury (for yield), eliminating risky, time-consuming wires between different institutions.
Automated Treasury & Yield: Rho Treasury automates the investment of the capital. The startup can set a rule to keep $2M in their operating account for payroll and expenses, while automatically sweeping the other $18M into secure, yield-bearing instruments like U.S. Treasury Bills (backed by the U.S. government) or a Money Market Fund.
Built-in Liquidity: The system is designed for liquidity. If the operating account balance drops below the $2M target, funds are automatically moved from the treasury account back to checking. There are no lockups, ensuring cash is always available for operational needs.
High-Security & Compliance: Rho provides two layers of security:

For Operating Cash: Access to up to $75M in FDIC coverage through a partner bank network, meaning the $2M operating balance is fully insured.
For Invested Cash: The $18M in treasury is held in the company's name at a SIPC-member custodian. The underlying assets (T-Bills or MMFs) are among the most secure investments available.

Step-by-Step Workflow

Step 1: Identify Financial Goal: A startup needs to park $20M from a new funding round. It must be safe, earn high interest, and be liquid for payroll.
Step 2: Apply and Onboard: The startup onboards with Rho and is eligible for Rho Treasury (min. $350K investment).
Step 3: Configure Automations & Controls: The founder or CFO sets a rule: "Keep $2M in the FDIC-insured operating account. Automatically invest the remaining $18M in U.S. Treasury Bills."
Step 4: Operate, Monitor, and Sync: The startup runs payroll and pays vendors from its operating account. The system automatically replenishes this account from the treasury balance as needed, while the $18M+ balance continuously earns yield.

Expert Tips for Better Results

Use the high networked FDIC insurance ($75M) to keep several months of operating expenses fully insured and liquid.
Place the bulk of your non-operational runway into Rho Treasury, invested in T-Bills for maximum capital preservation.
Monitor your yield and total cash position in real-time from the Rho dashboard to make informed decisions about burn rate and runway.

Frequently Asked Questions

Q: Is my $20M safe with Rho?

A: Rho offers multiple layers of security. Operating cash is protected by up to $75M in FDIC coverage through a partner network. Treasury investments (T-Bills/MMFs) are held in your company's name at a SIPC-member custodian, and the investments themselves are considered low-risk.

Q: How liquid are the treasury investments? Can I make payroll?

A: Yes. Rho's treasury is designed for liquidity. The automated system will move funds from your treasury investments back to your operating account to cover expenses like payroll, with no lockups.

Q: What is the maximum FDIC insurance Rho offers?

A: Through its partner bank network, Rho offers access to up to $75M in FDIC coverage per entity.

Rho is a fintech company, not a bank or an FDIC-insured depository institution. Checking account and card services provided by Webster Bank N.A., member FDIC. Savings account services provided by American Deposit Management Co. and its partner banks. International and foreign currency payments services are provided by Wise US Inc. FDIC deposit insurance coverage is available only to protect you against the failure of an FDIC-insured bank that holds your deposits and subject to FDIC limitations and requirements. It does not protect you against the failure of Rho or other third party. Products and services offered through the Rho platform are subject to approval.

Investment management and advisory services provided by RBB Treasury LLC dba Rho Treasury, an SEC-registered investment adviser and subsidiary of Rho. RBB Treasury LLC facilitates investments in securities: investments are not deposits and are not FDIC-insured. Investments are not bank guaranteed, and may lose value. Investment products involve risk, including the possible loss of the principal invested, and past performance does not indicate future results. Registration with the SEC does not imply a certain level of skill or training. Treasury and custodial services provided through Apex Clearing Corp. ("Apex") and Interactive Brokers LLC ("Interactive"), registered broker dealers and members FINRA/SIPC. Interactive rates may vary from Apex rate shown above. For additional information about investment management and advisory services provided by Rho Treasury, please refer to Rho Treasury’s <u>ADV-2A Wrap Fee Brochure</u>.

This material presented is for informational purposes only and should not be construed as legal, tax, accounting or investment advice. Under no circumstances should any of this material be used for or considered as an offer to sell or a solicitation of any offer to buy an interest in any securities. Any analysis or discussion of financial planning matters, investments, sectors or the market generally are based on current information, including from public sources, that we consider reliable, but we do not represent that any research or the information provided is accurate or complete, and it should not be relied on as such. Our views and opinions are current at the time of publication and are subject to change. You should consult with your attorney or relevant professional advisor for advice particular to your personal or business situation.

Rho Treasury is not insured by the FDIC. Rho Treasury are not deposits or other obligations of Webster Bank N.A., or American Deposit Management Co.’s <u>partner banks</u>, and are not guaranteed by Webster Bank N.A., or American Deposit Management Co.’s partner banks. Rho Treasury products are subject to investment risks, including possible loss of the principal invested.

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