Cash Is Only King If You Use It
I saw one of the investors in our funds on the plane back from SF last week. He reminded me that "cash is king" and certainly it is. We've done an analysis of our entire portfolio, the cash balances of each company, their cash burn rates, their runways (cash/burn) and have charted these metrics for our entire portfolio. We are feeling pretty comfortable but we've got some issues in our portfolio like everyone else in the venture business.
In the midst of that work, our friend (and investor in our funds) Tom Evslin writes this important post:
Cash is king. VCs like Fred Wilson are advising their portfolio companies to be in cash-preservation mode for the very good reason that more cash will be hard to come by and, if obtainable at all, may come with serious dilution as its price. But, if your company has cash, this can also be a wonderful time to spend. In the end you will succeed because of what you DO spend your money on.
Even with all the cutting that is going on out there (I can almost hear it), nobody is going to stop spending. And what you spend your precious cash on is critical. Go read Tom's post for more.