This Week in Startups

Managing your cash reserves | Startup Finance Basics w/ Kruze's Scott Orn | E1644

5 snips
Dec 21, 2022
Scott Orn, COO of Kruze Consulting, shares his expertise in financial management for startups. He emphasizes the importance of protecting cash reserves and developing a solid investment policy. Founders learn effective strategies for managing cash flow and reducing unnecessary expenses, especially focusing on subscription services. Orn also discusses lessons from past financial crises and stresses the need for disciplined spending as startups prepare for the challenges of the new year. This conversation is packed with invaluable tips for maintaining financial health.
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ADVICE

Fiduciary Duty

  • Founders have a fiduciary duty to manage raised capital responsibly.
  • Invest in safe, interest-bearing accounts, not risky assets like Bitcoin or equities.
ADVICE

Investment Policy

  • Develop a simple investment policy and ratify it at the board level.
  • Consider money market funds, CDs, and short-term bond ladders for safe, liquid investments.
ANECDOTE

Auction Rate Securities Risk

  • Scott Orn shares a story about a company that invested in illiquid auction rate securities.
  • When the market crashed, the company faced a liquidity crisis, leading to the CEO and CFO's dismissal.
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