This Week in Startups The Best Financial Advice VCs Give Startups | Startup Finance Basics w/ Kruze's Scott Orn
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Oct 17, 2024 
Scott Orn, COO of Kruze Consulting, offers invaluable financial wisdom tailored for startups. He discusses the essential strategies for managing cash flow, warning against the perils of over-fundraising. Orn digs into the importance of accrual accounting for transparency with investors and highlights the need for effective financial planning. He also shares insights on maintaining credibility with VCs through consistent communication and the development of robust financial models. A treasure trove for any founder looking to navigate the startup financial landscape!
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Cash Runway and VC Advice
- Secure sufficient cash runway aligned with your milestones to avoid running out of money.
- Consult VCs for advice on fundraising and market conditions, as they possess valuable insights.
Risks of Over-Fundraising
- Avoid over-fundraising, which can lead to inflated valuations and unrealistic expectations for future rounds.
- Focus on achieving product-market fit before aggressively pursuing funding.
Accrual vs. Cash Accounting
- Use accrual accounting, not cash accounting, for a more accurate and normalized financial representation.
- Accrual accounting smooths out fluctuations, providing a clearer picture of your burn rate and runway.