The article highlights that startups often face cash flow problems not due to ambition but a lack of financial visibility. As companies scale and reach closer to product-market fit, founders may overlook crucial financial planning. Even profitable startups generating significant revenue can encounter dangers if they treat revenue as a safety net without understanding margins and expenses. Founders are cautioned against overconfidence in sales forecasts as it can lead to poor financial decisions that jeopardize their business.
Too many founders assume revenue = safety. It doesn't. Revenue without control is just noise. If you're scaling without tracking margins, that revenue can mask dangerous cracks.
Cash flow problems rarely begin with expenses. They begin with overconfidence in the sales pipeline. Founders often make hiring decisions based on pipeline forecasts that never materialized.
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