On Thu, Jul 7, 2011 at 12:15 PM, Phares Kariuki <pkariuki@gmail.com> wrote:
Question, for those who have run tech startups, how do you deal with excessive revenue? Given that tech firms many times operate on high margins, let's, for the sake of example, say you have a product that, with an expense book of roughly 1M (Rent + Salaries), and your monthly revenue is 8 M KES. What do you do with the remaining 7M? Some say invest in product development but even then, you will still have quite an amount of change. What happens to that change? Invested in a bank? Or in some form of Fixed Income Securities (Bonds, T-Bills etc). What's the general practice in .ke?
what you need is ultra-short term debt funds (some people call them liquid funds ) these invest in commercial paper , money market instruments, t-bills , certificate of deposits etc .. either on a overnight basis, weekly, 10 days or 30 days ....etc. you also need a regime where when you liquidise these funds the settlement happens in a reasonable amount of time (e.g. a bank fixed deposit can be liquidised in the same day ...such a fund should also be liquised in the same amount of time ) ... i dont think these kind of funds exist in kenya ?