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Bursts of Color - Venture Debt and CFO Stuff

This week's shout-out goes to the finance pros who are working overtime right now to keep our busines
Bursts of Color - Venture Debt and CFO Stuff
By Geoff Donaker • Issue #5 • View online
This week’s shout-out goes to the finance pros who are working overtime right now to keep our businesses afloat. Following are a few related resources from my favorite finance guy, Rob Krolik.

Fun with the finance guy (in an airport shuttle... remember those?)
Fun with the finance guy (in an airport shuttle... remember those?)
Venture Debt and other Financing Alternatives
A common question this month is:
If I want a bigger cash cushion without raising VC, what alternatives do I have?
The good news is that there are alternative capital providers out there, and some may be a good fit for you. Here is a starter list of debt providers. Please keep in mind that most of these folks have been bombarded in the last few weeks, so you may get a warmer reception if you’re able to wait for a sunnier day. If you have others to recommend, please send them over and we’ll add to the list.
Keep Your Cash… as Cash
In the happier market of last month, some financial managers chose to invest their company’s cash in bonds and bond funds, which usually yield better than money market accounts. Unfortunately, many of those bonds are now effectively illiquid, or have to be sold at a big loss. Yuck. Anytime you have less than 18 months runway of “cash,” Rob suggests that you keep 100% of it in money markets and let your business growth drive the returns. While earning interest is nice, the main goal should be to have the cash available at anytime.
For those who have the high class problem of >18 months runway, here’s a template Investment Policy you may wish to review with your board before investing in anything with liquidity risk. The mantra is preservation of cash.
Quick Read: Article about CFOs
Rob recently co-authored Good CFO / Bad CFO for CFO Magazine (which, I’m sure, is already on your night stand). Teaser:
A good CFO paints a financial picture of the company’s next 12 to 24 months to help the senior executives see the future and plan accordingly.
A bad CFO gives engineering, product, or marketing advice to the respective executive. 
Hat tip here to an old Ben Horowitz post: Good Product Manager / Bad Product Manager.
ICYMI: Sequoia’s Planning Matrix
This planning template has been making the rounds; it’s another helpful way to think about Plan B/C scenarios.
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Geoff Donaker

Bursts of Color is a newsletter for start-up leaders who work with Burst Capital. It's meant to include products, people and ideas that I think are interesting and maybe relevant for you.

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