This is intersting.

Occasionally in YC founder circles a new founder will raise a bunch of money and then ask something like "What's the best way to invest all the money our company just raised?"

The responses are always along the lines of "Your startup is already risky. Don't innovate in areas of your business where the status quo is known to work. Innovate your product + technology, don't be innovative with your company's finances, HR, etc"

That advice always stuck with me. It just makes a lot of sense to do things in the most boring way possible, except where it matters (your competitive advantage <-- that's where you innovate, that's where you set yourself apart)

Running a startup is distracting enough. Doing things non-standard just adds to the list of distractions that you don't need as a founder.

YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.

The simplest explanation is that this is a mostly symbolic move: They want to show that the stable coin and crypto companies they invest in are actually trusted by YC. It starts to look hypocritical if an investor is funding crypto companies and praising them as important breakthroughs, but not actually using them where it’s important.

I agree, if you just want to not "waste" the cash while it's sitting, keep it very simple with something like T bills or, if you don't need it immediately, maybe a total market fund.

This also makes sense from the investors point of view, they invested in your company to receive growth from your product/business, not from random stocks you bought with it.

That said, I think there is a distinction between trying to be innovative across the company (ex. Gitlab's open employee handbook, CEO shadows, etc.) which is arguably not a bad thing at all, and this specific case of trying to actively invest company funds. In some cases, a more innovative way of doing things may actually be simpler and less complex than the default way for bigger companies, it just depends on the exact scenario.

Relevant question: How many YCombinator portfolio companies issue stable coins.

Stablecoin-adjacent YC companies:

• Bridge (acquired by Stripe for $1.1B) — stablecoin infrastructure, now offers "Open Issuance" platform for others to launch stablecoins

• PrimeVault (S2022) — helps enterprises issue & manage digital assets/stablecoins

• BlindPay (W2025) — stablecoin API for payments

• Coinbase (S2012) — issues USDC (with Circle)

> What's the best way to invest all the money our company just raised?

You should invest in some YC startups with your YC investment money.

Not all stablecoins are intended as investments. For many it's just a way to send money internationally without dealing with the SWIFT system, waiting periods, banks losing payments etc.

It does seem ironic that a startup would immediately pivot to devoting some of its precious time and attention to becoming a hedge fund just as they've got the funding for their 'startup idea'. On the other hand, any big whack of cash should have an optimisation plan, lest it be wasted. Does YC provide templates?

Oversimplifying:

X = full amount of raised capital

Y = expected spend over 12 months

Z = $ value of percentage contingency for 12 months

Y+Z goes into use-it-however-and-whenever-you-want account (likely low to no interest)

X - (Y+Z) goes into a 12 month higher interest account, ideally staying untouched until maturity (stake the stablecoins in this context)

I'm skeptical of crpyto holding companies though, explicitly because of the lack of regulation. The likes of BlockFi, Celsius, and FTX gives me the cold sweats. Regulation in the US is notoriously lacking even in well established finance and banking, never mind the crypto 'industry' which was always high-percentage grifters, and now the Epstein files has added 'morally corrupt' tags to more of them.

Recipe for sleepless nights, which is already a problem for a startup founders isn't it?

I like your writing. Do you have a blog or publish anywhere else?

Yeah but after a series of Big Prints we finally managed to make an inflation spike, a run on Silicon Valley Bank, the US President openly contemplating dollar devaluation, "Sell America trade" working for the first time in 50 years, the marginal buyer of treasuries eliminating the last dove on the path to war, and precious metals whipping around like meme stocks. "Park the money in a USD money market at SVB" used to be not just OK, but universally agreed to be obviously OK, which had value of its own. Now it's just OK. Probably. I hope.

Will we see some pivots into bullshit crypto holding companies? Sure, but VC returns are notoriously lottery-ticket distributed and 0 is 0 however you get there. I'd hazard a bet that the number of otherwise-successful companies who die due to this policy rounds to 0, while the probability of an inflationary wrecking ball that wipes out an entire batch of otherwise promising startups in the absence of such a policy is... north of zero.

To be clear, I don't think this is due to a special property of crypto, just the flexibility to get away from USD in case of emergency.

EDIT: maybe 24/7 trading could be an argument. It would be a meme for the ages if a raft of startups survived because they were up hustling and grinding at 2AM when the boats hit the Taiwan Strait.

Then again, to play devils advocate, doing all the other stuff in a new way might also help your company break out of the cycle that typically impacts startups. It may be that the other things you do apart from your product are what make it successful.