You might not have ever used Factored Quality, but there's a good chance something in your house passed their streamlined supply chain quality control procedures before arriving at your door. Factored Quality is used by brands like Dr. Squatch, Resident, and Canopy—ecommerce firms who need a reliable partner on their factory floors when rapid growth outpaces their ability to monitor quality themselves.
But when funding markets started to tighten in late 2022, CEO Prince Ghosh knew his company needed a way to extend its runway. Mayfair presented a unique chance to avoid standard cost-cutting solutions like workforce reductions.
“When we wanted to extend runway, Mayfair was the easiest way to reduce our burn rate.”
Factored Quality was already well-positioned as a startup: it had an established product with plenty of capital. Nonetheless, Factored Quality’s investors recommended Ghosh find additional ways to extend the amount of time Factored Quality could operate with its existing cash. For most VC-backed companies, this means decreasing burn rate: startup parlance for cost-cutting. Ghosh knew, however, that his team was already lean and cutting talent would serve only to stagnate growth.
“We intentionally already ran lean: every member of our team is essential so building runway by cutting talent would be self-defeating. We needed another way to stretch our budget without crippling our company.”
Building a longer runway
Factored Quality has what many startups do: a large amount of cash from a prior round, little of which is actually spent month-to-month. It occurred to Ghosh that this money could be serving another role instead of waiting in a zero-interest business checking account. He began searching for higher-yield alternatives.
“Mayfair made it super easy to get 4% back on cash in our bank account.”
Reading about Mayfair in the forums of Y Combinator, of which Factored Quality was a cohort member, Ghosh created an account shortly after Mayfair was launched in November 2022. Unlike other options he was considering, Mayfair didn't require switching bank accounts or time-intensive management; it was hands-off while delivering a yield on Factored Quality's cash that was hundreds of times higher than what he was earning at his banking partner.
Putting cash to work
Since then, Factored Quality has earned over $64,000 simply by storing its cash in a Mayfair account, where it's eligible for pass-through FDIC insurance. Mayfair's software automatically keeps Factored Quality's operating account funded to meet monthly expense needs, meaning Ghosh and his team don't lift a finger to earn monthly yield on their hard-earned cash. The result is more time, and teammates, building for their clients.
“… It was the easiest way to reduce our burn rate and offset the cost of a full-time employee.”