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Ignorance is likely a bigger cause when the company is not funded. Funded companies have people they have to report to with milestones, financial status etc.

Ignorance is likely a bigger cause when the company is not funded. Funded companies have people they have to report to with milestones, financial status etc. So they should not have an ignorance problem when it comes to cash flow etc. But I totally agree that most small businesses/startups without funding or outside assistance will likely not really know where they stand day to day which can cause the big uh oh. Funded companies that let it get to this point, know they let it go to far. If they can't meet the milestones or get more funding etc, then they should really have the wind down plan available and the cash on hand to pay for it.

onion2k 11y ago
My startup was funded. During the 18 month runway when we were spending the investment money we had a grand total of 2 meetings with the investors. We did a lot wrong, but so did the VCs in my opinion - we were a 'boring' business tools company from an accelerator full of exciting B2C, 3rd sector, big data and social media companies. They ignored us. If I did it again I'd absolutely insist on more oversight and input from the VCs but that's something you only learn with hindsight. We were definitely one of the ones that let it go too far.
- davismwfl 11y ago
  Ouch, sorry to hear that, but I believe everyone does a lot wrong, just hopefully we can outweigh the screw ups with enough successes to make it work. To me the support from an institutional type investor (VC) is to help you dodge preventable mistakes and open doors, which is the bigger attraction than just cash (not that cash can be dismissed). It sucks to hear you didn't get that. Do you think your experience is more normal from what you know or that it was more an anomaly? I ask because I have raised money for a couple of my own companies in the past, mostly from high net worth individuals and every time I was required to provide monthly/quarterly financial reports and projections. And they were reviewed and if stuff didn't line up or they saw something I didn't I would get a call to discuss it. I sometimes resented it right at the moment because I was knee deep in a customer issue or feature, but I learned a lot and it continues to help me now.

onion2k 11y ago

My startup was funded. During the 18 month runway when we were spending the investment money we had a grand total of 2 meetings with the investors. We did a lot wrong, but so did the VCs in my opinion - we were a 'boring' business tools company from an accelerator full of exciting B2C, 3rd sector, big data and social media companies. They ignored us. If I did it again I'd absolutely insist on more oversight and input from the VCs but that's something you only learn with hindsight. We were definitely one of the ones that let it go too far.

davismwfl 11y ago
Ouch, sorry to hear that, but I believe everyone does a lot wrong, just hopefully we can outweigh the screw ups with enough successes to make it work. To me the support from an institutional type investor (VC) is to help you dodge preventable mistakes and open doors, which is the bigger attraction than just cash (not that cash can be dismissed). It sucks to hear you didn't get that. Do you think your experience is more normal from what you know or that it was more an anomaly? I ask because I have raised money for a couple of my own companies in the past, mostly from high net worth individuals and every time I was required to provide monthly/quarterly financial reports and projections. And they were reviewed and if stuff didn't line up or they saw something I didn't I would get a call to discuss it. I sometimes resented it right at the moment because I was knee deep in a customer issue or feature, but I learned a lot and it continues to help me now.