Tren Griffin @trengriffin I work for Microsoft. Previously I was a partner at Eagle River, a private equity firm established by Craig McCaw. I am on the board of directors of Kymeta. Dec. 02, 2019 1 min read

Fred Wilson: "I read a piece on Alan Shugart, the founder of Seagate, one of the most successful disk drive companies. Alan was quoted as saying that 'cash is more important than your mother.' That got my attention because mothers are really important." 

"Cash is everything in a startup. It is the fuel that keeps the car running. Startups fail largely because they run out of cash. Forecasting cash is more art than science, particularly in a growing company. You have to engage in cash forecasting [and] engage in it regularly..."

There have been a lot of breathless articles lately about the need for startups to "get profitable." What's really happening is business are being forced to focus on cash and cash management. Shit happens. Having cash gives you optionality. Not having cash when needed is deadly.

A business running out of cash is first and foremost working to generate more cash. Second in importance is cash. After that they're focused on cash. Profit or earnings may or may not deliver absolute dollar free cash flow that the business can spend. Cash is business oxygen.

You can follow @trengriffin.


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