Running out of money is a common cause of startups failing.
You may be building a great product, but money in the bank is what can keep you
going. Planning your cash requirements accurately upfront itself ensures that
you do not get into a position where money, or the lack of it, blocks the path
to reach your goals.
Drawquest was a startup looking to create a drawing community
online. The product got great traction. It was downloaded more than 1.4 million
times in a year and had more than 25,000 people using it on a daily basis. What
the business was not able to do was to monetize this traffic. The startup could not raise investment as well
and eventually ran out of cash.
Advice – Financial planning is crucial for any startup. Planning out a requirement of cash helps the entrepreneur thinking about arranging the same, without having to run out of money.
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