SaaS Startup Running Out of Money? When to Call It Quits
Running a SaaS startup is challenging, especially when funding dries up. Knowing when to persevere and when to shut down is crucial. This guide offers practical advice for navigating this difficult situation.
Have You Reached Key Milestones?
Investors look for traction, growth, and scalability. If you're struggling to secure funding, re-evaluate your milestones. Are they achievable with your remaining runway?
Assess Your Runway
Less than 5-6 months of runway puts you in a precarious position. Fundraising takes time. Be transparent with investors about your zero cash date. A realistic plan might secure a bridge round.
Can You Buy Time?
Explore options to extend your runway. Consider drastic cost-cutting measures like layoffs, reducing non-essential spending, or focusing on profitability. These are tough decisions, but necessary for survival.
Is Your Business Viable?
Be honest about your business's potential. Not every startup succeeds. If you see no path forward, it might be time to move on. Many successful founders have pivoted or started over after an initial setback.
Don't Give Up Prematurely
Persistence is key. Many successful founders faced near-failure before achieving success. If a sliver of a chance exists – a pivot, a bridge round, or a renewed customer focus – fight for it. Balance relentless pursuit with realistic assessment.
If you can find a way to make it work, don't give up. But also know when to cut your losses and move on to the next opportunity.
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