Managing startup finances can be a complex task, especially in today’s ever-changing business landscape. In this blog post, we’ll provide you with 5 strategies to help you manage your startup finances and de-risk your business.
Managing Startup Finances With the Right Banking Partner
Traditionally, big banks haven’t been kind to startups. To de-risk your startup’s finances, look for an alternative banking partner like Mercury bank, Brex, or other potential alternatives. Use at least three bank accounts to hold your capital.
Boost Your Startup’s Finances With Alternative Funding Sources
Traditional banks may not offer the best options for startup funding. Look for non-dilutive funding sources like Ark Kapital, Pipe, and Founder Path, or consider venture debt programs like those offered by SVB. For hardware startups, consider financing equipment sales through River Capital Finance.
Manage Startup Finances Aggresively During Crisis
To effectively manage cash flow during a crisis, prioritize payments to ensure payroll and rent are paid first. Delay non-essential expenses, negotiate payment terms with suppliers, and follow up with customers to collect outstanding payments.
Streamline Startup Cashflow Using Unsecured Credit Cards
To minimize personal liability, use an unsecured business credit card like those offered by Brex, Mercury, or Ramp. Consider delaying non-essential expenses until your cash flow improves.
Adopt a Profit-First Philosophy for Financial Success
Consider hiring a CFO who can help you adopt the profit-first philosophy, which involves putting profit first and designing a business model around it. This will help you to better manage your finances and de-risk your business.
Summary & Additional Resources
As a founder CEO, your #1 responsibility is to manage your startup’s finances effectively (here is a nice video on this topic by YC). By following the above strategies, you can successfully manage your startup finances and de-risk your business. Remember, effective financial management is critical to the long-term success of any startup.
FYI – Are you currently raising or planning to raise capital for your business? Here is a post I wrote on 3-Absolute Must Do’s for Founders When Raising Venture Capital