VP of Product
A startup makes their cash last longer
Recently, I wrote about how corporate treasurers and institutional fund managers are exploring digital assets to maximize cash returns in an environment of historically low interest rates. I also highlighted how Shark Tank star Kevin O’Leary¹ chose to allocate funds at his venture firm into Circle Yield, a crypto investment built on USD Coin (USDC) with bitcoin collateral.
Today, I want to cover how Circle Yield* can benefit another type of business: startups who want to strategically use their treasury to make their cash last longer while delaying their next funding round and founder dilution. Minds is a blockchain-based social media startup that has recently captured the attention of major media outlets, including the Wall Street Journal, Wired, TechCrunch and Reuters. They recently closed a $10 million Series B funding round and began considering ways to put the funds to work on-chain, due to the above-average returns in digital asset markets and their commitment to the crypto ecosystem. Minds chose to allocate a portion of their raise into Circle Yield. Here’s a look inside their choice.
Crypto returns, without the volatility
Circle Yield is denominated in USDC, the world’s fastest-growing dollar digital currency, which can be ideal for investing idle treasury balances, paying suppliers and accepting payments from customers. Yield offers a fixed term and a rate** that’s much higher than those available from banks and many fixed income markets, which helps balance growth and security. Importantly, it is overcollateralized with bitcoin that’s held with a third-party custodian for extra security.
“The ability to create yield on our idle USDC balance is a game-changer,” notes Bill Ottman, Minds’ CEO. “Circle Yield is helping us plan our growth, because we can project future cash flows from the earnings and budget that money into how we scale.” Circle Yield is available in terms ranging from a month up to a year, and the ability to choose a fixed, short term can be crucial for growing companies with unpredictable working capital needs.
Circle Yield is central to Minds’ treasury diversification strategy. Since it offers a fixed rate, Minds can grow their treasury reserves and minimize volatility while keeping funds on-chain. The company can also operate more simply, with USDC’s stability and liquidity across numerous blockchains and in many wallets and exchanges. Since a number of Minds contractors and suppliers already accept USDC as payment, the company can pay them straight from its Circle Account without needing to reach into its bank account and deal with the friction inherent in traditional funds transfers.
In his own words
“I want to have our balance sheet work for us, and I don’t think this concept should be limited to major public companies. We believe in the crypto space, so we want to leverage Circle Yield along with direct allocations into Bitcoin and Ether to capitalize on the growth and momentum of the industry. Voting with your balance sheet is a major paradigm shift in corporate treasury strategy.”
– Bill Ottman, CEO, Minds
To Learn more about Circle Yield, book a meeting with one of our crypto investments experts today.
¹Kevin O’Leary has invested in and is currently a stockholder of Circle Internet Financial Limited.
*Offering subject to business approval, geographical availability***, and regulatory authorization, and there is no guarantee that the product will become available in a specific timeframe or to a specific customer or geography. Circle Yield product offered through Circle International Bermuda Limited (“Circle Bermuda”). Circle Bermuda has entered into lending arrangements with one or more institutional borrowers, including Genesis Global Capital, LLC****. These lenders pledge and transfer Bitcoin into custody with a third party custodian as collateral for their USDC borrowings and Circle Yield investors benefit from a security interest in Circle Bermuda’s security interest in the pledged Bitcoin.
Circle is not a bank; your Circle Account is not a bank account, and any funds are not insured by the Federal Deposit Insurance Corporation, the Securities Investor Protection Corporation or by any US or foreign government agency, insurance fund, person or entity. For investors in the United States, investments described in this communication are offered by Circle Bermuda to “accredited investors” only in accordance with Regulation D, Rule 506(c) of the Securities Action of 1933, as amended. While Circle Bermuda is regulated by the Bermuda Monetary Authority for digital asset business, Circle Bermuda is not engaged in banking and deposit taking activities and is not regulated for these purposes. You should carefully conduct your own investigations and analyses in connection with any participation in this product, including its objectives, risk factors, fees and expenses and the information set forth here and in other Circle Yield materials. Before investing, you should carefully review the risks highlighted in the risk disclosure appended to the line of credit agreement. All prospective participants in the products described herein are advised to consult with their legal, accounting and tax advisers regarding any potential participation. Please read the offering documents carefully before you invest. Additional information is available upon request.
Circle Account and money transmission services are provided by Circle Internet Financial, LLC. Circle Internet Financial, LLC, NMLS # 1201441, is a licensed provider of money transmission services. A full list of Circle’s licenses can be found here.
** Rates are purely indicative and are subject to change pending availability, approval and market conditions. In the case of a Fix Term Advance, Lender does not have a repayment right for fixed rate Advances.
***Not currently available in the following U.S. states: Alaska, Minnesota, New York and Hawaii.
****Learn more about Genesis Global Capital, LLC here.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.