Free advice for start-ups. Microsoft blogger Don Dodge rarely misses an important conference, and earlier this month he was in San Francisco for the annual Web 2.0 Summit. Dodge, based in New Hampshire, posted some notes from a talk given by venture capitalist John Doerr of Kleiner Perkins. Doerr offered some coping advice for start-ups facing the recession:
# Act now, get more financing from existing investors.
# Protect the vital core of the business. Be clear about what is core.
# Have 18 months of cash on hand based on a conservative revenue forecast.
# Defer all [capital expenditures] and large purchases.
# Reevaluate R&D priorities.
# Renegotiate all contracts, including rent. You will be surprised what can be renegotiated for a lower price or better terms.
# Everyone in the company should be selling . . . Everyone!
# Offer equity instead of cash for everything.
# Secure your cash in T-bills. Money markets aren't safe enough.
# Figure out the leading indicators of your revenues so that you can react quickly if things get worse.
# Over-communicate. Don't sugar coat anything. Be honest and don't be afraid to say you don't know.
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