Persistence Beats Resistance

Founders tend to get systematic about money management AFTER a crisis hits.

Wrong!

The biggest lesson I've learned is to implement sound money management from day one.

But...

We are human and make mistakes.

So what do you do when you're running out of runway?

In less than 5 minutes today you will get:

1. 5 strategies to extend your cash runway

2. 10 absolute must-dos to raise venture capital quickly

Let's go 🚀

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5 Strategies to Extend Your Cash Runway

1) Ask your employees to take a voluntary pay cut

Sounds crazy right? Don't worry, I thought it was crazy too until I tried it when Covid hit and funding dried up.

The best people on my team voluntarily took pay cuts of anywhere from 20% to 50%.

It helped me stretch our runway by 2-3 months.

Of course, I first announced that the founders will be taking a zero salary to lead by example.

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2) Look for alternative funding sources

Startup-focused banks offer great services like Venture Debt. Click here to learn more about venture debt.

Traditional banks suck at this stuff.

Have a look at non-dilutive funding sources like Ark Kapital, Pipe, Founder Path, etc.

For hardware startups, have a look at River Capital Finance to finance equipment sales.

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3) Unsecured Credit Cards

Credit cards have been a founder’s best friend to launch a new business.

Starting a business is risky, so find a business credit card that is unsecured. Otherwise, you will be personally liable.

SVB used to offer unsecured credit lines, but now that’s over.

Have a look at Brex, Mercury, Ramp, etc.

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4) Crisis cash flow management

Review all of your expenses and identify areas where you can cut back without compromising your operations. Consider delaying all non-essential expenses until your cash flow improves.

Cut founder salaries immediately. Then C-suite salaries. Prioritize your payments to ensure that payroll and rent, are paid first.

Put an ACH block on recurring payments if you cannot get your vendor to delay them.

Negotiate payment terms with your suppliers to delay payments without incurring additional fees or penalties. If they don’t agree, only pay the critical vendors, everything else goes on hold.

Follow up with customers who owe you money and try to collect outstanding payments as soon as possible. Offer a 2-5% early payment discount.

Create a cash flow forecast for the next 30 days, taking into account your projected income and expenses. This will help you to anticipate any potential shortfalls and take proactive measures to manage them. Add a 2-week delay to collections to be conservative.

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5) Adopt Profit First and get a startup-experienced profit-first fractional CFO

The right CFO will help you more than just model cashflows and plan for raises. He/She will also coach you on how to handle tough times like this SVB crash.

I’m very keen on the profit-first method and I’d highly recommend it to every founder.

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10 Absolute Must-Dos To Raise Venture Capital Quickly

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1/ Prepare a winning story before talking to a single investor
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2/ Practice the pitch like a naive 10th-grader.
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3/ Have ALL KPIs/metrics at your fingertips.
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4/ Wheel and deal with multiple investors in parallel.
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5/ Stop wasting time on VCs that don't give a soft yes after 3 meetings.
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6/ Understand that you might have to raise multiple smaller rounds to de-risk.
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7/ Be ready for it to take 6+ months.
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8/ Optimize for valuation AND control.
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9/ Run backdoor reference checks on the partner and fund.
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10/ Continue building the business while raising capital.

(Click here to download my ultimate fundraising guide if you haven't already)

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Are you starting a new business or feeling challenged in your current business? Here's how I can help:

1. If you're a founder in the early stages of launching a business (just curious/have an idea/planning phase/tight budget):

→ My affordable digital course on How to Build a Tech Startup with No Experience gives founders like you the ultimate library of proven playbooks to build a business from scratch. All my best content is already in there and more gets added every month 👉 Get your course access here.

2. If you're a founder currently building a business and want to unlock growth:

→ I run a 1on1 coaching program to help growth-mindset founders like you accelerate their business (read testimonials). In my program, I teach you the exact systems I used to raise $7M in VC funding, launch cutting-edge AI & Robotics products, build a high-velocity B2B go-to-market program where we sold $300,000+ deals, and collaborated with global Fortune 500 brands like Pepsi and John Deere. Let's set up a quick 30-minute strategy session to see if my coaching program is right for you 👉 Click here to book your strategy call.

That's it for today. I'll see you next Sunday at the same time.

Cheers

Sawruv

p.s. I'm on a mission to impact 100,000 founders positively. If you think this newsletter can help 1 other founder in your network, then forward this email to them or ​Share this link so they can subscribe to accelerate growth.

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