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Assuming that your question is not rhetorical, there are multiple ways to address this cash flow problem. You can focus on collecting revenue faster, offering n
by bmh100 11y ago
Assuming that your question is not rhetorical, there are multiple ways to address this cash flow problem. You can focus on collecting revenue faster, offering new customers less generous payment terms, demanding payment up front or in advance, taking out loans against your receivables, asking vendors to finance your spending, converting a portion of employee compensation to a profit share that is payed out on a later date, finding strategic partners to provide financing or resources, etc. I hope this is helpful. There are many possibilities, but none are necessarily better than selling equity.
- copsarebastards 11y ago> You can focus on collecting revenue faster, offering new customers less generous payment terms, demanding payment up front or in advance, It's worth adding that these in particular are good business practices with or without VCs, because: 1. It demonstrates that people will pay for your product. Nothing is worse than spending money making something only to discover nobody will pay for it. 2. It's aware of the 80/20 rule. Up-front payment does a good job of limiting you to the 20% of your client base who will make you 80% of your money. The clients who want things most on their terms, who will nickel-and-dime you, make unreasonable demands, and review you poorly to other clients, are going to balk at an up-front payment and go elsewhere, and that's a good thing. You don't need them. They'll weigh down your competitors and leave you more efficient.