4 ms·

Yeah, resuming business and being OK with the death toll is certainly an unpopular opinion. If you have hospitals overwhelmed because business just has to cont

Yeah, resuming business and being OK with the death toll is certainly an unpopular opinion. If you have hospitals overwhelmed because business just has to continue, business will suffer regardless. I also don't quite understand how a $300M (assuming revenue, not valuation) company can run out of cash in 6 weeks. You're saying you can't make payroll in 6 weeks at the current trajectory?

pvarangot 7y ago
I've seen and worked for companies in that situation, you have a 200/300M valuation on the bull market but you are running out of cash and expecting to get a new round based on great growth numbers or achieved goals. When I was there we got the round and were saved, but I can see that not happening in the current situation.
mercutio2 7y ago
Neither valuation (which I assume was what they meant) nor revenue tells you much about a formerly-growing company's fixed costs or its reserves. Rapidly growing companies frequently have very limited reserves. When revenue collapses, as it has for many industries, your fixed costs dwarf everything else and most businesses will be in trouble.
- conductr 7y ago
  Bingo. Our whole business was debt fueled M&A. So opex along with interest are big nuts. Shoveled every dollar back to M&A not much safety net.
conductr 7y ago
Businesses suffering usually effects investors more than employees. This is different. It all has to do with how much cash you have to weather the storm. My firms investors wanted us to be cash efficient. Meaning we don’t have much of a safety net. This is the PE mindset IMO. As CFO one may think this is my decision, but really I advise to risk and the board ultimately decides. Bigger companies who have hoarded cash since 2008 or before will survive but still lean down. It’s possible banks will help companies like mine stay afloat. We have relationships in place and plan to pursue capital. Not sure how that will play out.
- dathinab 7y ago
  > My firms investors wanted us to be cash efficient. Meaning we don’t have much of a safety net. This being common or even the norm is one of the (many) fundamental problems of our current economical system.
daxorid 7y ago
This is one of the consequences of the modern obsession with "reach for yield" or growth at any cost. Everyone feels pressure to put every single dollar "to work", because everyone else is. It's an extremely fragile modus operandi, but managers would get fired for underperforming their peers if they didn't do it, so the incentive structure guaranteed the result.

pvarangot 7y ago

I've seen and worked for companies in that situation, you have a 200/300M valuation on the bull market but you are running out of cash and expecting to get a new round based on great growth numbers or achieved goals. When I was there we got the round and were saved, but I can see that not happening in the current situation.

mercutio2 7y ago

Neither valuation (which I assume was what they meant) nor revenue tells you much about a formerly-growing company's fixed costs or its reserves. Rapidly growing companies frequently have very limited reserves. When revenue collapses, as it has for many industries, your fixed costs dwarf everything else and most businesses will be in trouble.

conductr 7y ago
Bingo. Our whole business was debt fueled M&A. So opex along with interest are big nuts. Shoveled every dollar back to M&A not much safety net.

conductr 7y ago

Businesses suffering usually effects investors more than employees. This is different. It all has to do with how much cash you have to weather the storm. My firms investors wanted us to be cash efficient. Meaning we don’t have much of a safety net. This is the PE mindset IMO. As CFO one may think this is my decision, but really I advise to risk and the board ultimately decides. Bigger companies who have hoarded cash since 2008 or before will survive but still lean down. It’s possible banks will help companies like mine stay afloat. We have relationships in place and plan to pursue capital. Not sure how that will play out.

dathinab 7y ago
> My firms investors wanted us to be cash efficient. Meaning we don’t have much of a safety net. This being common or even the norm is one of the (many) fundamental problems of our current economical system.

daxorid 7y ago

This is one of the consequences of the modern obsession with "reach for yield" or growth at any cost. Everyone feels pressure to put every single dollar "to work", because everyone else is. It's an extremely fragile modus operandi, but managers would get fired for underperforming their peers if they didn't do it, so the incentive structure guaranteed the result.