This week, I had a long conversation with a founder. He’s been building his start-up for several years, and he relies on government grants for a large part of his operating budget. He’s getting paying customers too, but not enough of them that he can rely solely on that revenue to fund his operations. He has a multiyear grant from the federal government, but those funds can’t be disbursed to him until a certain act that allows a particular agency to disburse funds is passed. The founder was banking on that money to fund 2026, but he hasn’t received the funds yet and won’t until the legislation passes. He’s in a tough spot. He has about 30 days’ worth of cash left. After that, he’ll have to start reducing expenses and headcount.

This isn’t great, but it’s not unheard of for entrepreneurs. Being short on cash, for whatever reason, happens a lot. I’d argue it’s more the norm than the exception. While the times we’re living through can be stressful for founders and their teams, opportunities exist. When everyone knows that the survival of the company (and their job) is on the line, they get laser-focused. People quickly buy into any changes that align with survival and put their all into making them successful. Alternatively, these moments force founders to think about sources of capital from perspectives they hadn’t considered before. Said differently, the crisis forces founders to think creatively about how they can fund their business. I know founders who, faced with cash crunches, launched new products and services that became so successful that they generated most of the company's revenue.

Being short on cash is no fun when you’re an entrepreneur, but when it happens, consider how you can use the situation to think creatively and get your team focused on what matters most.