This Week in Startups Managing Finances in a Recession: Startup Finance Basics w/ Kruze's Scott Orn | E1622
Nov 29, 2022
Scott Orn, the COO of Kruze, shares his extensive expertise in startup finance and accounting. He dives into the current state of the startup market, emphasizing the need for smart budgeting strategies, especially for Seed stage startups. Scott stresses the importance of clear communication with investors, advocating a proactive approach. He also discusses effective financial modeling techniques and the necessity of aligning business goals with funding milestones to attract venture capital, providing valuable insights for navigating challenging economic conditions.
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Faster Reaction to Downturn
- The current market downturn resembles the 2008 crisis but startups reacted faster.
- This is partly due to the "dry run" experience of the COVID-19 pandemic.
Surprise Low Runway
- Jason Calacanis criticizes entrepreneurs who surprise VCs with low runway.
- He compares this to a pilot not knowing fuel levels or altitude.
Budgeting Advice
- Create a detailed budget once your startup grows beyond a small team.
- Early on, rough estimates suffice, but later, a formal budget is essential.