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If a startup is running out of money, who should be the last to go?

So if a startup has, say a month or two of cash, with a handful of founders. The founders all believe in the company, the software works and traction is starting to happen. How should it prioritize funds to maximize the runway, specially as far as the team is concerned?

  • Totally depends on the company. Startups generally require a lot of marketing so keep the pitcher, but if it’s a high tech startup then the CTO should learn some people skills.

    The less essential founders could start doing some consulting work to keep the show on the road, keep their titles and return post-traction.

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  • Totally agree. Founders take no salary and then figure it out. This includes anyone who received equity simply as a result of coming up with the idea in the first place. If you added somebody later and offered equity simply as a sweetener to get them to work as an employee, then decide whether they are instrumental to the success.

    Somebody recently told me “it’s never about the money.” If you fail to find the money to keep your experiment going, then it wasn’t really about the lack of money in the first place – it was lack of something else. If you are all on the same page and see the extraordinary potential, you’ll locate money somehow.

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  • Founders should stop paying themselves. Offer to employees the option of working for stock for a few months or maybe even taking a short term leave…

    If you’re a founder and you continue to take a salary while laying off your staff, you will fail.

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