sam_palus

5 ms·

1.
by sam_palus 6mo ago
I'd totally agree, if it took 1-2 weeks to onboard and manage! But it really does just take a few minutes. And it'll get even easier once we add our auto-sweep features in the next few weeks, and you'll be able to just set
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by sam_palus 6mo ago
Excited to have you on board!
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by sam_palus 6mo ago
We totally agree! And that's why we specifically designed Palus to be as easy to use as possible. It's a one-time setup that takes five minutes. We optimized our UX for founders to spend as little time using it as possible, so the
4.
by sam_palus 6mo ago
Even for a Series A company, putting $5M into Palus yields them an extra $50k-75k per year, just for letting their money sit in a smarter place. It's a five-minute optimization which essentially gets you half a junior engineer's a
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by sam_palus 6mo ago
This is actually something we've done quite a bit of research into developing! What you're describing is very similar to repo lending in institutional finance. We ultimately decided against implementing it for our initial product,
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by sam_palus 7mo ago
Agreed, QSBS is too valuable to be cavalier about. The active business asset test is about "intent and substance" and not balance sheet line items. I think it's very clear in this case that you'd be using it as a cash eq
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by sam_palus 7mo ago
Thanks! In general we optimize for simple UX and would rather connect to your banking app than replace it. That does help keep feature demand down. But our goal is to grow along with our customers, communicate closely with them, and add the
8.
by sam_palus 7mo ago
Do you mean this Crescent? https://www.getcrescent.com/ They're more of a traditional banking product. They seem to have a great high-yield checking account (3%), which is a great place to keep short-term cash. But for
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by sam_palus 7mo ago
We're up-front with founders that Palus is meant for longer-term cash, not money you'll need on short notice. Even then, our liquidity timeframe is typically 1-2 days. I'm curious about your experience dealing with your board
10.
by sam_palus 7mo ago
To add more context: yes, US Treasuries are exempt from state tax, and municipal bonds are tax exempt too. It's pretty rare for startups to hold them directly; they usually hold money market funds. It varies between different MMFs, but
11.
by sam_palus 7mo ago
I definitely see your point. Our thesis with the MBS product, in finance terms, is that most startups can afford to take on a bit more liquidity risk on their long-term cash (on the order of a couple of days) to get significantly better yie
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by sam_palus 7mo ago
This is really only an issue for startups with effectively zero revenue. Your company gets classified as a PHC (and is subject to additional tax) if investment income, including interest, is more than 60% of its revenue. This isn't som
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by sam_palus 7mo ago
Yeah that's a great point. We do have some pieces up already ( https://www.palus.finance/info/safety ) but plan on adding way more. Honestly this HN post has been really insightful in knowing what questions founders
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by sam_palus 7mo ago
Thanks! Yes we do. Sign up or book a call on our site and let's discuss.
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by sam_palus 7mo ago
Agency MBS holders who weren't levered or forced to sell never realized losses during the GFC. There were short term paper losses on some MBS, but it was overwhelmingly on long-duration fixed-rate MBS and incurred by people who held
16.
by sam_palus 7mo ago
The bond funds offered in existing startup treasury products aren't suited for startups' long-term cash reserves. They either offer low-yield money market funds, or bond funds that aren't well suited for capital preservation
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by sam_palus 7mo ago
Good find- 2.85% is great for a business savings account. All that is to say: businesses shouldn't treat all their cash the same way, especially when they have significant runway. The exact breakdown depends on the business, but typica
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by sam_palus 7mo ago
Very well put. And yes, to your point, we don't lever up. And yes, SOFR + 1.5% isn't very sexy, but we're competing against existing treasury product that use money market funds and pay SOFR (or less, after fees). So that 1.5
19.
by sam_palus 7mo ago
That's fair. But to your point, the problem we see is that banks' treasury products take advantage of founders who (rightfully) don't want to think about their treasury yields. That's why we designed Palus to be as simpl
20.
by sam_palus 7mo ago
Fair! Growing user trust is definitely one of the biggest challenges building in this space. For what it's worth, we don't hold users' funds ourselves; we use an SEC-regulated custodian (Alpaca) with the assets legally held i
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by sam_palus 7mo ago
STRC has only been around for less than a year. I don't know too much about what assets it holds (and maybe it's worth me looking into it), but those kinds of returns are generally a sign that you're taking on a lot more risk
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by sam_palus 7mo ago
Yep! Fill out the signup on our website and we'll be in touch
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by sam_palus 7mo ago
The 4.5-5% yields we quote are net of expense ratio. Then our cut is 0.25%, comparable to the 0.15% to 0.6% charged by Mercury, Rho, etc. And we're working on bringing that expense ratio down as we scale. Functionally speaking, short-d
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by sam_palus 7mo ago
These are good points. On the government backing: it's a fair nuance to point out. In a technical sense, Ginnie Mae has the explicit full faith and credit guarantee while Fannie/Freddie are GSEs with an implicit one (and are under
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Launch HN: Palus Finance (YC W26): Better yields on idle cash for startups, SMBs
62 points by sam_palus 7mo ago|92 comments