All about Me…

Survival Strategies for the Startups in Current Financial turmoil

Posted by vishalsinghal on October 15, 2008

You need to build your business, or your portfolio, based on underlying fundamentals that will carry you through good times — and bad.

Here are a few things Bryan Roberts thinks all entrepreneurs should do now:

1) Reaffirm the value-creating milestones for your business.

2) Focus your capital on hitting them in the most efficient way possible.

3) Ensure that your current cash is safe. Is it invested in stable corporate bonds (like GE)? Or is it sitting in financial institutions, even the finance arms of manufacturing companies (like GMAC)? Are your lenders likely to deliver money they have agreed to lend? Do your investors have reserves for future rounds?

4) Look at your burn rate to make sure current expense rates still make sense. This has more urgency for later-stage companies that are selling a product, but those in R&D mode should always be thrifty.

5) Lead. Reaffirm the viability and vision of your company to the troops. This will counterbalance people’s tendencies to worry about their jobs and dreams, even decrease the time spent watching stock tickers.

However, while funding will be harder to come by, there will continue to be capital available for really great companies and good ideas. Keep in mind that many of our greatest companies were founded during, or toward the end of, recessions, among them IBM, Hewlett-Packard and Microsoft

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