TechCrunch’s Michael Arrington has a very informative piece on the credit crisis and its effect on startups. Apparently, many startups are putting their venture cash in Auction Rate Securities, financial instruments that are normally very liquid and provide better yields than typical bank savings/checkings accounts. Unfortunately, the perfect storm of the current credit crisis has put a freeze on the ARS market and startups are finding a difficult time to access their cash.
What really surprised me from the article was that many startups were putting their cash in …