For sure. The post I was replying to was for a seed stage company though. They’ve got $250k secured by Monday. My point was small firms can meet payroll and bills just fine with only $250k

Sure, pre-seed. Seed is usually $2m-5m these days, and received all at once (mostly) as compared to VCs which do capital calls.

A company with 26 people, each making $120k (pre-tax), or a company with 51 people, each making $60k/yr pre-tax is enough to miss payroll this week if there's only $250k to draw from, and that's not accounting for any other expenses (like, say an AWS/GCP bill, though hopefully you're net-60 with them). CEO/CFO's also now got two weeks to come up with another $250+k in a complex environment.

but do you automatically get access to the insured part, or do you have to sit around and wait for a few months until FDIC hashes it out with whoever? it could be really a matter of life and death for some startups.

For sure. The post I was replying to was for a seed stage company though. They’ve for $250k secured by Monday. My point was small firms can meet payroll and bills just fine with only $250k

Yep traditional advice is don't burn > 100k / mo when early stage, and most lower. So 2mo+ payroll fine for a normal seed, early A. Later stage are normally more sensitive. It's also a real issue with profitable companies whose outflows are at that level and are considering bigger purchases -- I'd be bailing if we were there just bc that.

Except the last couple years have been bonkers with little revenue / spending alignment during fundraising. Early stage burns are above that level, which makes the situation worse for current crop of co's. Ouch and good luck :(

The IOUs that FDIC hands out can be borrowed against, or sold. There will be a lot of people active this week trying to buy them at favorable rates