During the dot-com era, there were many companies that had to close their doors because they didn’t properly manage their cash flow. When these companies ran out of cash, they were forced to go back to the venture capitalists that provided the wherewithal to get the companies started in the first place. Venture capitalists are a tough bunch and they don’t like it when the companies in which they’ve invested don’t properly predict how they will burn through the capital that was provided to them. So, in many cases, the VCs just pulled the plug on these dot-com companies.
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Know Your Burn Rate or Get Burned
Posted by: Theodore F. di Stefano December 20, 2012 05:00 AMDuring the dot-com era, there were many companies that had to close their doors because they didn’t properly manage their cash flow. When these companies ran out of cash, they were forced to go back to the venture capitalists that provided the wherewithal to get the companies started in the first place. Venture capitalists are a tough bunch and they don’t like it when the companies in which they’ve invested don’t properly predict how they will burn through the capital that was provided to them. So, in many cases, the VCs just pulled the plug on these dot-com companies.