{"id":9004111225912140,"date":"2023-04-20T09:38:30","date_gmt":"2023-04-20T09:38:30","guid":{"rendered":"https:\/\/www.startupforstartup.com\/?post_type=blog&p=9004111225912140"},"modified":"2023-05-15T11:27:10","modified_gmt":"2023-05-15T11:27:10","slug":"10-tips-for-early-stage-startup-pitch-meetings-2","status":"publish","type":"blog","link":"https:\/\/www.startupforstartup.com\/ww\/blog\/10-tips-for-early-stage-startup-pitch-meetings-2\/","title":{"rendered":"My insights on runway planning"},"content":{"rendered":"","protected":false},"excerpt":{"rendered":"","protected":false},"featured_media":9004111225913354,"template":"","meta":{"_acf_changed":false,"_yoast_wpseo_focuskw":"Runway","_yoast_wpseo_title":"","_yoast_wpseo_metadesc":"How to plan your startup cash burn management, and runaway? Slavik Markovich, a founder shares his insights","_yoast_wpseo_canonical":"","_yoast_wpseo_opengraph-title":"","_yoast_wpseo_opengraph-description":"","_yoast_wpseo_twitter-title":"","_yoast_wpseo_twitter-description":"","site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"_yoast_wpseo_focuskw_synonyms":"","aisum":"","author":"Slavik Markovich","page-excerpt":"

In recent years I had the chance to talk with many entrepreneurs, both as an investor <\/span>and an entrepreneur. As often happens nowadays, the conversation usually shifts to <\/span>fundraising, cash burn management, and runaway<\/strong>. <\/span><\/p>\n

Many venture capital funds have a <\/span>rule of thumb saying that the raised funds should suffice for 24 months, and some even <\/span>go as far as 30 months. I *kind* of agree, but my advice is to bear in mind that this is<\/span><\/p>\n

only a rule of thumb and not holy scripture.<\/span><\/p>\n

The founders (and the investors, if there are any) need to agree on the next company <\/span>goal that will place it in a good position (be it additional fundraising or profitability). The <\/span>goal can be incomes, number of users, partnerships, etc. depending on the type of <\/span>company and GTM, but all parties need to agree on it. Once the goal is set, it is <\/span>possible to make the relevant calculations and to build a budget that will bring the <\/span>company to that goal.<\/span><\/p>\n

The budget determines the fundraising sum according to the <\/span>\u201cGoldilocks principle\u201d <\/span>(yes, <\/span>the girl from the children's story about the three bears). This is especially important <\/span>when determining the Goldilocks Zone - you can raise more funds or less funds based <\/span>on considerations such as valuation, market status, and quality of investors, but if you <\/span>deviate significantly, it will be harder for you to survive and thrive.<\/span><\/p>\n

Many would say - why not raise significantly more funds than the budget if we can?<\/strong> You <\/span>need to remember that fundraising affects the behavior of the company. Once you raise <\/span>funds far beyond the budget, you are more likely to exceed it and burn cash. There is a <\/span>fear that you will recruit a lot more people than you actually need and a year later you <\/span>will discover that you are behind your goals and you will need to tighten the belt, which <\/span>is the opposite of being hunky-dory. If you don't raise enough funds, you will depend <\/span>heavily on the market conditions and on immaculate execution of your plans (which <\/span>rarely happens). <\/span><\/p>\n

I experienced this in 2008 and I don't wish anyone the ordeal of seeing <\/span>revenues and signed contracts disappearing, and having investors who were willing to <\/span>take a gamble during a period of crisis evaporate just when you need them the most.<\/span><\/p>\n

Having to fire a significant part of the company because there is no money for salaries <\/span>and having to cut salaries for the rest is an especially painful experience.<\/span><\/p>\n

Your ability to build a budget is instrumental in avoiding such difficult situations, or at <\/span>least, considerably lowering the risk. Nothing can replace experience when it comes to <\/span>this.\u00a0 If\u00a0 this\u00a0 is\u00a0 your\u00a0 first\u00a0 time \u00a0 planning \u00a0 a\u00a0 budget<\/strong>,\u00a0 don't\u00a0 try\u00a0 doing\u00a0 it\u00a0 alone.\u00a0 Hire\u00a0 a <\/span>professional who has witnessed dozens of start-ups, consult other more seasoned <\/span>founders, and remember that many clich\u00e9s carry more than a grain of truth.<\/span><\/p>\n

* Not everything is under your control - global crisis periods might slow down progress <\/span>for months or even years<\/span><\/p>\n

* In most stages of company development, there are more questions than answers.<\/span><\/p>\n

Leave considerable margins of error for making changes and getting out from local <\/span>failures. It is important to remember that at least one, and sometimes all, of the following <\/span>will occur:<\/span><\/p>\n