| The following may or may not apply to your specific situation, but this is what I would be thinking in your case. You have two options:
A. Accept failure, fold the company now, return remaining investor funds and get a job. B. Do whatever it takes to get profitable in the next 60 days. This is a possible game plan for option B. 1. If you're doing enterprise sales, your problem is likely as much about cash flow as it is revenue. Collect as much cash as you can now. Get customers paying monthly/quarterly to pay annually. Make big prospects an offer they can't refuse to prepay in advance. 2. Get revenue any way you can. Become a consulting company. Do things that don't scale. Sublet your office. Hold events at your office and sell tickets. Sell some Aeron chairs. Just get some more cash coming in. 3. Cut costs ruthlessly. With 2-3 months left, there is no way you should have 10-15 employees. Assume you have 3 months left to live. Do you really need all of them that badly? It will be tough and heartbreaking to let people go, but it's better to let half go with warning than to have everyone find out they're not getting paid a couple months down the line. Cut benefits immediately. Yes it will be tough and unfair, yes it will hurt morale, but you're at the end of the line. Do it. 3 months of runway with 15 people could become a year of runway with 3 people. 4. Mine your CRM and personal network for leads. Strip mine it for whatever value it has left. From now on, everyone on the team is spending at least 30% of their time on the phone with customers. Either you get some sales, or you get some great feedback about customer pain points and problems you can use for your next effort. Stop coding. This is one problem you won't be able to code your way out of. 5. Unless you have amazing revenue traction, forget about raising more money. The one thing VCs hate most is a rock that is rolling downhill. Fundraising will be a fatal distraction. Instead, go back to your bootstrapping roots and do whatever it takes to get profitable now.
Exception: Your current investors may have some capital in reserve to support you. Ask them for it. If they don't re-up, your fundraising prospects are good as dead. Feel free to shoot me an email with more specifics, happy to give other advice if you think it's useful: ilya [at] mixrank.com. |
We have internally been looking at what a shell team looks like for Plan B and when we'd need to start throwing the chairs out of the plane but also had been trying to consider the signal that sends to investors. We are launching a new sales effort in the next week and there is a chance it could prove promising, so Plan C is bet the rest of the company on it. We have been upfront with current investors and they don't want their money back, they want us to keep it rolling, but the ride is about to get bumpy.