Most startups are burning cash, meaning they are spending more money than they take in. Ideally, the startup will hit meaningful milestones around revenue, customer momentum, and more well in advance of running out of money. By hitting milestones, they can then raise more money from investors or achieve break-even to continue on indefinitely. One debated recommendation I’ve heard numerous times is that a startup should internally socialize the number of days of cash on hand until running out (and thus being out of business).
Here are a few thoughts on internally sharing the number of days of cash on hand:
- Share the number of days of cash on hand in the context of the greater mission (e.g. as part of a simplified one page strategic plan)
- Educate the team members on how the ideal startup process works with milestones, multiple rounds of financing, value in growing faster than…
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