Most start-ups fail because they run out of cash. They can have great press, a great product, and even customers . . . but still run out of cash. Understanding the cash situation is the founder’s responsibility. At CCAW, I received a cash flow report every morning. I always knew exactly how much was in the bank, down to the penny. Cash is a company’s oxygen. When you run out of oxygen, you suffocate.
In the early days of a start-up, the founder is responsible for cash. If investors are the sole source of it, the founder pitches to investors. If customers are the sole source of it, the founder sells to customers. If cash comes from both sources . . . you guessed it, the founder is pitching and selling. Absent product–market fit and a defined sales process, the founder is the rainmaker who keeps the bank account in the black.
Raising capital is a core part of the job for early founders. If you’re considering starting a company or you already have, take this responsibility seriously. If you don’t, your journey will be short.