How can entrepreneurs maximise their investment post-funding rounds

After successfully completing funding rounds, many entrepreneurs and their teams face the challenge of deciding where to hold funds until they're ready to use them. Many businesses simply default to their existing banking arrangements, often receiving little by way of interest in return. 

Managing money around traditional savings accounts, although generally considered safe, can be burdensome and time-consuming for stretched management teams. While larger businesses may have the resources to retain an in house ‘treasury’ function within the finance team to manage reserves, Evelyn Partners’ Cash & Cautious Bond (C&CB) portfolio offers entrepreneurs an alternative that could potentially provide better returns than a standard corporate account and reduce the administrative burden

In the UK, money saved in traditional savings accounts by both individuals and corporates is generally considered safe and is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per UK-regulated financial institution. This means that if a bank fails, then the FSCS is obligated to return any reserves up to £85,000 per person or corporate entity within seven days. This limit can be exceeded by all but the smallest of businesses, therefore reserves are often spread over multiple accounts by entrepreneurs so that this protection can apply if needed.

However, managing multiple notice and fixed-term deposits across various banks can be a daunting task for businesses. This approach consumes considerable time and energy, while not always offering the highest return on funds. Meanwhile cash and bond portfolios typically offer higher returns than traditional accounts, but they do come with a degree of investment risk so you might not get back the amount you put in.  

• Potential for higher returns: UK Government bonds currently offer returns more than those typically offered by traditional savings accounts. Indicative returns after costs range between 3.3% and 4% per annum, as shown in the chart below:

Current or past yield figures should not be considered reliable indicators of future returns.

• Diversification: By purchasing UK government bonds, we are in effect lending our client’s reserves to the UK government rather than another institution. This reduces counterparty risk, because lending to the UK government is generally more reliable as they are less likely to default than entities offering corporate bonds, for instance
• Risks: Investments fluctuate in value and you could get back less than the original invested amount
• Traded daily, the price and value of Government bonds do move based on interest rate expectations. This can have a large impact in the value of long dated bonds but is considerably more muted for the short-term bonds that typically make up the C&CB portfolio. Where a gilt is held until maturity, the return is fixed but where funds are required before this point there is a risk that you receive back less than originally invested
• Accessibility: Fixed term deposits can typically offer enhanced returns when compared to instant access accounts, however, they are not as accessible. If you want to access your money earlier, it is likely that you will be charged a penalty fee or lose out on earning higher interest. UK government bonds, meanwhile, are traded daily and can therefore be sold as and when required*
• Time and energy savings: The C&CB portfolio acts as a treasury function, simplifying the management of company reserves and allowing you to focus on your business. Fees can apply to some traditional savings accounts and the C&CB has fees too. Evelyn Partners charges a 0.1% management charge and a 0.1% custody fee. These costs are considered in indicative returns noted above 
  

One of the strategies employed within the C&CB portfolio is the gilt ladder. This involves creating a portfolio of UK government bonds (gilts) with varying maturities to align with the business’s cash flow needs. By matching these maturities and holding to maturity), it is possible to increase the likelihood of positive returns.  

Gilts must be chosen carefully, particularly as those with longer maturities, can fluctuate significantly in value with interest rate changes. By focusing on gilts with a short time until maturity, we can reduce the potential impact of changing interest expectations.  By aligning the maturity of the gilts held in the portfolio with the company’s cash flows this risk is reduced. However, if you need to sell gilts prior to redemption, you could get back less than you invested. 

There are many businesses that have benefited from our C&CB portfolio offering. More recently a rapidly growing business, fresh from a successful Series A round, faced a challenge: their Chief Financial Officer (CFO) was overwhelmed with managing multiple notice and fixed-term deposits across various banks to avoid excessive exposure to any single institution. This task consumed significant time and mental energy. After consulting us, the company  instead invested in the C&CB portfolio. 

This move delegated the operational cash management to Evelyn Partners, effectively acting as a treasury function. Evelyn Partners created ‘gilt ladders’ to align maturities with the company’s expenditures, such as new hire and equipment costs. Importantly, the client retained the flexibility to access the capital without penalties.

The client also benefited from a dedicated investment manager advising on simplifying cashflow planning. In addition, for this case, the returns from short-dated gilts exceeded those of corporate cash deposits, averaging around 4 % (as at April 2025). This strategic shift has freed up time and optimised the company’s cash management.

By choosing Evelyn Partners’ C&CB portfolio, entrepreneurs could potentially get higher returns, and significant time savings than bank accounts, making it worth considering once a funding round is closed. 

Evelyn Partners offers combined wealth management services with professional advisors and investment managers who can help you work towards your financial objectives. To explore ways to balance your portfolio and enhance your investment growth, please book an appointment or speak to your usual Evelyn Partners contact.