Survival Tips for Tech Startups: Advice from MT Advisors, Angels and VCs on Leading Through COVID-19
Investors are hustling to help their portfolio companies survive the fallout from COVID- 19. Seasoned operating executives and investors will share their best advice on how early stage and high-growth startups can pivot their business models, plan for business continuity, manage cash flow, and live to fight another day. Speakers:
Susan Carstensen: Co-founder, Yellowstone Growth Partners; Former COO and CFO, RightNow Technologies
Pat LaPointe: Managing Director, Frontier Angels; Founder, Early Stage Montana; 20-year serial tech entrepreneur
Bill Stoddart: Co-founder, HomeStake Venture Partners; Founder of NorthFork Financial, GreenDrinks Bozeman and CeedNET
Full Transcript:
Christina: Welcome, everyone. I'm Christina Henderson, Executive Director of the Montana High Tech Business Alliance..Welcome to our webinar, Survival Tips for Tech Startups: Advice from MT Advisors, Angels and VCs on Leading Your Business Through COVID- 19. This event is part of a series of free webinars the Alliance is hosting in April in May, you can find the full schedule and recordings afterwards at mthightech.org/webinars. Our next event is coming up Tuesday, April 14 at 4pm: Crisis Communications: How to Work with the Media, Talk to Stakeholders and Share News (Good and Bad) in the Midst of Turbulent Times. That's with Kelly Schwager, who's the VP of Global Communications for Oracle. So check that out and sign up for that if you're interested. And I would like to thank the Board of Directors of the Alliance and our members for making this series possible. Today we're pleased to welcome three panelists to join us for this conversation. First, Susan Carstensen, co-founder of Yellowstone growth partners, former CEO and CFO of RightNow technologies in Bozeman. Pat LaPointe is Managing Director of Frontier Angels, the founder of Early Stage Montana, and a 20 year serial tech entrepreneur. And Bill Stoddart was co-founder of homestake Venture Partners and founder of North Fork Financial, Green Drinks Bozeman and Seed Net. So we are so pleased to have the three of you here today. Thank you for joining us. Just to briefly lay out the agenda. We'll start with some opening remarks from each of the panelists. So I'll have Susan and Pat and then Bill if you can each take a few minutes to introduce yourself a little bit more and give a little bit more on your background and the experience that you've had in business that brought you here today. And then, after about 15 minutes, then we'll open it up for Q&A. I have some questions prepared in advance. And then for those of you who are joining us, in the audience, you can enter your questions either in the chat box or in the Q&A tool. And I will moderate those questions and share them with the panelists as they come up. So with that, I'm going to turn the floor over to Susan to get us started.
Susan: Thanks, Christina. Hi, everybody.You know, as Christina mentioned, I've been in business for like 35 years at five different companies. And there has been some form of external crisis; there was one the late 80s, there was the .com bubble burst, there was 911, there was '08, you know, and now there's this. And I mean, it clearly is a crisis and as a business leader, it is all about what you do and how you lead, you know, kind of how you do execute through this that matters. And at kind of the highest level you know, my advice is to ground yourself. What do you know, what don't you know? What is your mission, vision, values, ground yourself in that. Make a plan, you know, it's like day to day right now, but it's like, what's the next next step forward? Execute the plan. And, above all else, communicate. Communicate with your employees, communicate with your customers, communicate with your lenders, communicate with your partners. You know, I used to always say, you know, in times of crisis, it was always like this, you had to resist the impulse to go behind doors and commiserate or, you know, what about this, or what about that, and that just inspired more fear. And so I've always said, open your doors, be out there. In this particular case, you can't, because everybody's working from home. And so this element of communicating is just so critically important that you'll never be able to do enough. And then, wake up the next morning and do all these things again.
Pat: Hey, everybody, nice to see you folks. Nice to see everybody seems to be doing well. Um, yeah, I'll build on what Susan said. So like Susan, I've been in the business world for over 30 years, and I actually founded three different tech companies and all three of them somehow managed to exist and survive through several of the big downturns including 2001, when I had a huge exit fall apart on my hands, and then in 2008, when I was rolling along with another business and doing incredibly well and lost almost 90% of our revenue, and wound up having to let go 40 of my 50 person staff in a relatively short period of time and had to rebuild it over a couple of years. So today running Frontier Angels, my view is a little bit different in the sense that in the past three years, I think we've evaluated over 1500 investment opportunities in early stage technology. We've made over four Investments through the angel group. And I've got another 52 investments in my own personal portfolio as both an angel and venture investor. And I'll build on what Susan was saying by picking up on the thread of the psychology of it. I think there's a massive psychological impact. When we go through a period of disruption, like we're going through now, it affects entrepreneurs in subtle and not so subtle ways. The first big one really, is that in a time of massive economic disruption when, when you're a tiny, tiny little boat on this huge ocean of rolling massive waves, sometimes you just can't row your way out of it, meaning that you just kind of have to figure out how to hunker down and survive for a while and wait 'till the winds die down, wait 'till the waves die down and then maybe all of your intelligence and your hard work and your focus and everything else are going to be able to help you road to where you're trying to get to. Unfortunately, I think a lot of entrepreneurs are born optimists. And if we weren't, we would never start businesses because the odds are so far against you when you start a business, that if we weren't just blind optimists, we would never do it. And that blind optimism gets us in trouble in the very early stages of disruptive times, because we tend to overestimate our own personal capabilities to influence things, when we should be hunkering down and cutting back. We're slow to make difficult decisions. And on a human level, it's really understandable because we have a lot of great relationships with our staff and with our partners and everybody else, and it's really hard for us to make those kinds of moves, but really, really necessary. And so that's an area that, you know, we can talk about a little bit further. And then there's the other psychological effects really, of just the impact that it has on you personally, as an entrepreneur, after you've succeeded to some degree, to start to see things falling apart around you, puts you into a less-than-productive emotional mindset often. And it's really important to try to be able to recognize when that's happening to you, so you can begin working your way out of it over time in order to get back to making better, smarter decisions that are really going to help you. So I'll stop there and let Bill jump in.
Bill: Thanks, Pat. Thanks, Suzanne, and Christina for hosting. You know, it's a great honor to be on a panel with folks who've got such deep experience and I know you guys out in the audience there are certainly lapping a lot of it up. You know from my perspective, I'm a co-founder of Homestake Venture Partners with Jeff Batten. So you may know Jeff, and basically what that group is, you know, as similar to an angel network, in a lot of ways, but focused a little bit more broadly on the types of businesses we work with. So not just tech companies, per se, or tech startups or startups in general, but, you know, really a broad array of local and regional businesses from, you know, ag value creation, to healthcare services, all the way through to, you know, some tech companies as well in our portfolio. You know, our approach is a little different than many, you know, VC-type approaches or even a lot of angels in that we're sort of not really focusing on a preordained exit or an exit strategy specifically. We really hope the businesses we work with, you know, remain in our communities for a long time. And, you know, obviously, that's an important part of the current framework that we're thinking about too is sort of local and regional economic resilience, and helping those companies, many that are struggling, you know, to make it through these tough times, and, you know, provide some guidance, and, you know, strategic CFO-type services to help those companies, you know, not only survive, but also grow. You know, we work with all kinds of businesses across the region. And we really emphasize that sort of open architecture of our platform, to frame whatever type of investment seems to be right for a given business. So in certain times debt may be appropriate in others equity, we use a lot of revenue based structures for what it's worth to try and work within that cyclical revenue type of world that many businesses live in. Which, you know, I think is very real, especially in times like today. I came to this work, you know, through my other businesses, which are really planning oriented, so I have a business Northfork financial, we provide planning and investment advisory services. And then we have a family office 45 North Partners. And in all those cases, really, you know, and including the homestake side, it really does to Pat's point around, you know, the psychology of it. How do we wrap our minds around the urgency, the the fear that exists in a time like this, and think about what can we do, you know, and maybe going back to some of the planning that we did early on in our business enterprises to start there and really focus on the plan that we started with, and get back to a lot of the basics, you know, the blocking and tackling of business, you know, is I think pretty critical to it, that doesn't mean that the urgency or the challenge or the or the concern is any more alleviated. It just gives us something to focus on. So that's a real quick overview of what we do and our perspective, again, is really helping in that organic growth curve in terms of the way that we approach the businesses that we work with our portfolio companies and partnerships.
Christina: Well, thank you all for those great introductions. You all are in sort of a privileged seat in that you work with so many different portfolio companies, and I'm sure have been talking with them constantly, over the few weeks that this crisis has been going on. From your point of view, what are you seeing are the general trends and patterns and impact of the COVID-19 crisis on companies in our broader business community?
Pat: Panic is the first one. Without a doubt, and justifiably so. Capital markets have dried up, and it's not that there isn't still a lot of capital out there. It's that investors are largely sitting on their hands for a little while until they can feel more confident that they see what the future might look like. So, you know, we had a huge stock downturn at the same time as the pandemic hit. And it's recovered half, maybe halfway, temporarily, but that's basically driven a lot of investors into a place where whether they're investing their own money as early stage angels or, or organizations like Bill do, or whether they're investing institutional money fund money like venture capitalists do. Even if you're sitting on a brand new fund of you know, 10s or hundreds of millions of dollars, they're being very cautious right now. And so entrepreneurs intuitively understand that, that the capital markets are going to get really difficult for a while. And so the ones that were unfortunate enough to be caught short of cash relative to whatever milestones they needed to achieve in order to get more cash, are in very difficult panic situations. They have to let go of a lot of the resources that have helped them build what they've built so far, and try to figure out if there's going to be a tomorrow that they can survive with them. And panic is, for the reasons I mentioned before, is a really hard place to start from because you don't think well, and what better evidence do we need that the first human reaction is panic, then everybody ran out and bought toilet paper? I mean, nobody went out--they didn't go out and pull all the food off the shelves. They didn't go out and grab all the bottled water, they went out and bought toilet paper, right. And so clearly, we don't think well, when panic is our first instinct. And so a big part of what we've been trying to do is--you know, I've had conversations with every one of the 40 companies that we've invested in, I've spent at least an hour on the phone with all of them-- it's just saying, hey, you know what, let's find the path through this. Let's breathe. Let's look at what we've got in the way of our assets. You know, what do we have that's valuable? What is the world showing us right now in terms of possibilities? Let's just identify scenarios. We don't have to make any urgent decisions other than how do we shed some of our cost structure so that we stretch our runway. So that's really what I see preoccupying a lot of the minds of early stage entrepreneurs right now.
Bill: Yeah, I would echo the cash piece in particular. I mean, you know, for our companies that we're working with, you know, some of them actually are doing better than they've ever done. Because of the markets they're in, the businesses that they have. You know, they're not preordained to any sort of exit they're not--we're not in controlling positions in board seats and driving certain things that may or may not be what they need to do or what's really essential to plan. And I think, you know, to Pat's point as well as the cash, taking the time to plan is, is really, you know, if you haven't done it before, now's a really great time to make sure that you've got a path forward that you can identify. Every business is a little different, or a lot different as it may be, and in some of our companies are very challenged, because they're, for example, in the hospitality space, or, you know, some of those places where, you know, literally, business has dried up, revenues have dried up literally overnight. But I think that, you know, in many ways, I think that our approach has always been one that is focused on a plan, focused on cash flow modeling in particular, and working with a cash strategy from the get go to drive and use that as the the main lever to think about how we move forward, whether it's from hiring or inventory or whatever it may be type of expenditure side to, you know, how do we look to additional markets for growth. So, in times like this, again, I would echo that that pure fear and panic are not a great place from which to make decisions. At the same time, stress can be a motivator, and can, you know, encourage different ways of thinking and in particular reaching out to the communities that you're involved with engaged with, even though we're at a distance physically, I think that there's a lot of resources that have come out of this environment. A lot more sharing, a lot more community-building, than certainly I've seen in the past. That brings a fair bit of optimism, you know, to the entrepreneurial side of the way I think about things too.The investor side is a little bit challenging and also unique to the mindset of the individual or entity that is looking to deploy capital. I mean, I think in general, folks are just taking a bit of wait and see attitude. I think there is a fair bit of cash on the sidelines and certainly a bunch of cash that is being injected from different, you know, in particular the federal government, but also interestingly from the Federal Reserve into the larger capital markets or more mainstream and public capital markets. So that's pretty interesting, as well, and I think there are definitely a lot of people that we talked to kind of have two mindsets. On one side, you know, I'm holding tight and at the same time, there's a number of people who are like, okay, let's find the opportunities because we know they're there. And in many crisis situations do present that, nothing about it from an exploitive or extractive perspective, but just saying, gosh, this is a thing that really needs to happen now, there's even more of a market gap than maybe even what existed previously to step into.
Susan: So, in terms of what I'm seeing and through YGP we advise companies and at a personal level, I sit on a number of different boards. You know, the one piece I'm particularly kind of concerned with is, you know, it's like I think the government actually, with the CARES Act and the some of the small business, you know, the PPP and all that, I think the intentions are good, but I am seeing companies thinking that that's going to rescue them, and therefore not always making the hard decisions that maybe they should make, to kind of be in control of their own destiny. Yeah, yeah, I worry. I worry about anybody who thinks that's gonna rescue them, to be honest. On the other side of it, what's been fascinating, just like over the course of it, I think it started Saturday. There are so few guardrails on the money and on the application process that virtually any business could apply, you know, that meets the small business category. But you really do have to certify that it's necessary for your business to continue. And originally, you know, all the different companies were just looking at it that it's like, it's a very cheap source of capital and why wouldn't I apply? and virtually everybody's business is impacted one way or another. So it's not, you know, it's not like you wouldn't say, oh, it's not going to be impacted. But is it necessary? And so the venture community actually, I think, led by Foundry, really started the conversation going with on within the venture community, that it's like these companies really, if you're a subscription-based SaaS business that's got a stable base of customers, and you're generating cash, or at least not burning very much, or if you just raised a bunch of money, do you really need this? And when you compare and contrast it to, you know, the restaurant down the street that's been literally shut down by the government, it's practically like they've been listed. That organization into this fight against the virus, you know, they desperately need it. But anyway, it's been a fascinating, like I said, just like three or four or five days of injecting, like the moral discussion of do you actually need this capital? In some of the companies that I'm working with. And I think it's healthy.
Christina: A related question from one of our participants: have there been new findings about whether VC backed companies qualify for the CARES Act, and specifically the questions around investors being defined as affiliates? Pat, I know you've looked into this extensively. So maybe for you and for Bill, do you have anything to add on to Susan's initial comments about whether the companies you advise should take PPP money, and also, is it available if they have investors?
Pat: Yes, they absolutely should, if they need it, they absolutely should. I think Susan's point is well taken that there's no such thing as a free lunch. While this is pretty close, it still comes with red tape that you can trip over. So you really do have to know what it is that you're asking for. And as it were in regards to the question about affiliates, that was clarified in Monday's release by the SBA, in which they clarified that venture backed companies are not considered to be affiliates as long as the venture companies don't have some form of restrictive covenant that gives them control-air quotes-over the Board of Directors or the company's ability to operate. Now even if there are control provisions in place, the venture firms can disavow those specific control terms and attorneys can advise you which ones they tend to be, which would then satisfy the condition and eliminate any concern about being considered an affiliate of your investor.
Susan: You know, I was on the phone yesterday with two different national recognized attorneys, one of which has taken an aggressive position that was like, oh, no, the provisions in the documents are not control provisions. And then the attorneys for the investor, saying we think they are, and I don't know that you necessarily will be able to convince either attorney groups to agree with the other and the quickest path is if the provisions get waived.
Pat: Yeah, that's going to be an uphill battle, though. It's going to be hard to see those provisions get waived so universally, except in situations where the company really does seem to have the biggest need, right?
Susan: Right. I do have three different venture firms that have waived the provisions for Montana companies that they do need the money. Yeah.
Bill: Yeah, I mean, from our perspective, you know, we don't really expect or ask for any control of the companies we work with, I mean, if there's a board seat, great, you know, but but there's, again, we're sort of kind of riding alongside with and providing the support, rather than expecting or exactly controlling in any way. So, it's not really a specific issue as far as we can see. I mean, you know, I would agree with Susan on the moral question, for sure, you know, as to saying, well, gosh, we've got, you know, sufficient cash in the bank for a year or more of runway or we've got a decent revenue model and we're doing okay, maybe we're a little pinched than normal or than we'd like to be. On some level, maybe one could say, hey, you know, why don't you apply? Whether you ultimately take it or not, is maybe another question that you can answer down the road. At the same time, I think one of the things that that we're thinking about is kind of a little bit bigger picture around, you know, the role that this PPP is playing and, and maybe a little more to Susan's point around the businesses that ultimately get supported by this and whether or not the value that they create or provide is, in quotes essential, or even, is there really a value there at all in a market and in a framework in an economic environment where we are sort of taking ourselves down to a little bit more of our core activities. So I think that there's something interesting there. And I also think that one of the things that, you know, personally, I'm concerned with as I think about the various hats that I wear is when we're in a situation where we've seen now, in 20 years, three major interventions by federal governments, national governments throughout the world, needing to step in to bail out a system at a systemic level. That's really deeply concerning. You know, it's deeply concerning when that exists on top of, you know, cheap money that the Federal Reserve is providing, you know, easy credit, generally speaking, subsidized AG, subsidized fossil fuels, you know, it really begs the question of, are we even on the right track in a lot of ways, systemically, and that's maybe more of a conversation over cocktails than it is, you know, directly addressing some of the issues that I know entrepreneurs on the ground are feeling. Yet I do believe that it's highly relevant. When we see the Federal Reserve throwing trillions of dollars to buy junk bonds, for example. You know, and again, I think it begs the question of, what is the value that we're creating as entrepreneurs? How should that value be represented and ultimately, you know, be reflected in a system that is a human construction and we have ultimate control over.
Christina: Let's shift to a topic that came up earlier in layoffs. Are you finding that some of the companies you work with have already faced the tough decision of making layoffs or that could be a tough decision that they have to make in the near future? And if so, how are you advising that decision, and how can companies make those hard decisions and make those layoffs in such a way as to, you know, both make sure the company is sustainable, but also protect their reputation as an employer and as a brand and with those departing employees, any advice in that arena. And Pat, it sounds like you had some very specific experience and being in those shoes in the past. Maybe we'll start with you, jump to Susan and then Bill again.
Pat: I think there are, obviously, many dimensions to the decision about what you do with headcount and people who are behind the headcount. It's easy to look at it on paper and make one set of decisions. It's a little harder to do it when you recognize what the impacts are. Having said that, as a business owner, I think one of the first key principles is that you're no good to yourself if you're out of business, you're no good to anybody if you're out of business. You can't create jobs, you can't create payroll, you can't create any value if you're out of business. And so generally speaking, the first principle that I try to make sure people are following is to stay in business. Now, if you're fortunate enough that in looking at a realistic assessment of your cash runway, taking into account your revenues in a conservative way, because a lot of us tend to overestimate what our revenues are going to be in disruptive times, but if you really roll back and take a realistic view of what your revenues are likely to be, and you can afford to keep your people on, then I think that's a brilliant decision. Because you've invested so much time and energy in helping them understand your business and your vision and what you're trying to accomplish. I just don't think that many of the businesses that are still in the emerging stages are at that point where they can survive this and hang on to all of their people. The businesses that I've been talking to seem to fall into thirds, where a third of them are just in very dire straits because they have less than two or three months worth of cash on hand. A third of them have maybe somewhere between six to 12 months of cash on hand, but not necessarily enough that they could be out there aggressively trying to grow something in the current environment. So they kind of have to figure out how to ration what they've got. And then a third of them are doing well enough that they can continue to survive and possibly even really thrive based on what they're selling at this time. If you happen to be in the first of those third groups, the ones that are really struggling, you may find yourself having to cut back all of your employees except for yourself. And by the way, you're gonna wind up cutting your own income back pretty severely as well.If you have to do that, it makes a lot of sense to approach it like a real human being, and to transparently communicate to people, what situation the company is in, and what options, or how few options, the company really has. And to help them understand that, you know, your goal is to keep the business alive long enough to reopen it again. And then to be able to bring people back. And I think if you're open, transparent, honest, in the way you communicate those kinds of things, I think the fairness doctrine kicks in and the people who work for you understand--that doesn't mean it's going to be easy, it means that they understand. So most importantly think about what you have to do to survive long enough. And then make the hard decisions that you need to make as soon as you can. We're also all very fortunate right now that for some period of time these federal government actions are going to make it easier for people who lose their jobs. Now, you know, the PPP loans make it easier to try to keep somebody, but I'd be careful about that too. Because from what I understand, it's already four to eight weeks before the time you apply and the time you expect to see any cash on a PPP loan. And so if your clock runs out on your cash runway in eight weeks, I think it's too much to assume that you can rely on that to keep all of your people on board. Because if it winds up taking 12 you may not be able to stay in business, you got too close to the edge. Those are some of the hard trade offs.
Susan: You know, I agree with Pat that you really need to make a realistic assessment of your business and what does it take to survive, you know, to fight another day. I would just encourage, I've only worked five places in my entire life, post college, and there's always been a crisis, and there've always been layoffs. And I'll just say how you do it really matters. Once you're having a conversation with an individual, it doesn't matter. You know, you can tell them the facts, you can explain all that, but you're giving them really hard news. And so, how you do it in terms of being transparent and upfront is important. Be as generous as you possibly can be. I mean, these are even like, I mean, I worked with a company and we talked about layoffs the fourth week in March. And it was like, okay, let's not do it till the first part of April because that'll buy them--we could pay for another month of health insurance. But it's like, honestly being as generous, within the construct of, you know, you are trying to survive to be in business another day, but be as generous as you possibly can. The companies I'm working with that are doing layoffs, I've got a CEO who took a 50% pay cut and the management team that took a 25% pay cut. You know, it's like I said, just be as genuine as possible and it's so hard to do. I mean, I hate laying people off or furloughing them. I mean, it's like one of the worst things I've had to do. But it's not about you as the leader who's doing it. It is about that person, and it's very, very personal to them. And so just do it well.
Bill: Yeah, I mean, you know, I would say that transparent communication, being empathetic and compassionate in the face of having to make layoffs, if that indeed is the case, and doing everything you can to prevent it. On the front end, of course, is what you can do. But if it is inevitable, then you know, being human and, and being just caring and thoughtful. You know, this is a classic Golden Rule situation where, you know, imagine yourself on the other side and what that person may be experiencing.
Pat: I've been there. I've been laid off in economic downturns and it's really hard.
Christina: Sounds like it's hard on both sides, whether you have to make that tough call or be the one on the receiving end. So empathy goes a long way. For this next question, this is from the audience. And I'm going to start with Susan, the former CFO, and then we'll go to Bill and then Pat. How does the leader think about managing burn rates through an unforeseeable future?
Susan: I would say start start with, you know, you look at the revenue scenario, and it's like, okay, if you've got an existing customer base, where you're generating revenue, that's going to be the most secure piece of business you have, but I would still, it's like, be realistic, some of those are going to go out of business, or they're just not going to be spending anymore. But that's kind of your base. For the most part, it depends on what you industry in or who you're selling to. But it's like, when I look back at right now where we always would miss, like during '01 or 9/11, we would be like, oh, we'll still get new business. Well, no, you don't get new business, every--you know buying freezes people's budget, you'll hear cash is king more times than you'll ever want to hear. But it's true for people that you think are going to pay you too. And so expect to be paid slower. New business is going to be harder. Focus everybody's attention in that business, if you've got a base of customers, on making sure that you're delivering incredible value to them. I mean, go above and beyond to your existing customers because that's typically what will get you through something. And so in terms of managing burn, figure out what that revenue run rate is or whatever and do everything you can, honestly, to get your expenses below that. I mean, you're only kind of in control of your own destiny, if you're not burning cash. And one of the worst things you can do as Pat alluded to earlier, that entrepreneurs are optimistic, but almost the worst thing you can do is to have too optimistic a projection and do a layoff and then have to do another one a month later. It's brutal. So, you know, if you can get to a point where you can get to cash flow breakeven and live to fight another day, that's what I think businesses should do.
Bill: Yeah, I mean, you know, I think that cash flow is really what it's all about and, you know, communication with current customers and clients is just so fundamental and all the more important in times like these. I guess I would add on the revenue side, you know, maybe discounting those revenues in various amounts as a way to just really say, okay, we're 20% discount on revenue, 30% whatever, and, and be able to sort of have those benchmarks hard and fast so you can see what you need to do on the expense side to stay cash flow positive. And so you can use the things that you can control, the things that you can know, as a way to, you know, kind of plan your way through uncertainty. That doesn't mean you're going to have the answers. I heard this phrase recently and it's really sort of stuck with me, the idea that we're walking backwards to the future. And there's a lot in that phrase that I'm not even going to pretend I can share in this short period. But, you know, it's something along the lines of, we can learn a lot from what's happened, and things that are closer in proximity or in greater detail, but fundamentally, we do not know what tomorrow's gonna bring. And so knowing what we can know about tomorrow, you know, through saying, hey, this is what our revenues have been, here's a 10%, 20, 30, whatever discounts you want to do, so that you can really have some strategic ideas in place and then make the tactical changes as necessary. You know, ultimately, whether that gives you a way to limit your burn or not, that's another question, but I would say fundamentals, like no cap x right now, like, you know, really manage inventory, really tighten screws on the expense side to get yourself through these sorts of things. And know that other people are doing the same thing, to Susan's point.
Christina: And, Pat, we're at the last last minute of our webinars, so bring it home for us, but what final words would you have for our audience on this issue?
Pat: I think it's really critical to get someone who has an objective perspective looking at what you think is going to happen to your business. Because if there's one thing I can absolutely guarantee is true, it's that you don't have an objective perspective. You will tend to overestimate how much of your revenue you're going to be able to hang on to, you will overestimate your runway. So I think the objective perspective is critical. I think the second thing that's really critical is to really focus on value, and by value what I mean is why do you exist? Why does the world need you? What problems are you solving for whom? And why are they willing to pay for you to solve those problems? And if you can do a better job of saying, what are the critical value milestones that I need to achieve in order to be able to either sell more or to raise more so that I can stay alive, focus on those critical value things. And then the third thing is, sometimes we refer to it as, you know, when we look at an entrepreneur we'll say, wow, she's got a loud clock, or he's got a loud clock. What that means is that there's a clock in the back of your head, it's tick, tick, tick ticking, as you know, you're burning cash, and it's forcing you to really try to accelerate your path to that value. So the third thing would be turn up the volume on your clock. It's really a good time to be conscious every single day of how much money is going out the door, more than what's coming in.
Christina: Well, thank you so much to all of our panelists today for that great advice. We do have a few questions that were posed in the chat that we didn't have time to answer. So we'll email those to you. And if you have words of wisdom, we'll include them in the transcript later on as a resource for folks. And we'll also have the recording of this webinar available, if folks want to revisit any of the content today. So thank you all for joining us. And again, check out our website mthightech.org/webinars to find both the resources from this webinar and other events coming up. So thank you all so much for joining us.
Susan: Thanks, everybody.
Additional Question: Could you recommend financial strategies on triaging vendor invoices?
Susan: Assuming the person means which invoices to pay or not pay, my answer would be:1. Pay what you need to keep operating (assuming you still have some business operations).2. For the rest, communicate with your vendors, explain you can’t pay them now or can only partial pay and explain your plan for the future (PPP, loan, staggered payments when you reopen). Be realistic. Be prepared to listen to their issues as you are hurting them as well.
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