If you took the step some time ago to start your own company, your startup may be running now, as you planned (in your business plan). Unfortunately it is more likely that the business plan didn’t work out so changed the plan, or actually you don’t work according a plan anymore. In other words, you are not the only one…

Some quotes about startups (source: 10 steps to product market fit):

  • 9 out of 10 startups/products fail
  • 66% drastically change their original plans
  • Not a better Plan A but a path to a plan that works before running out of resources
  • A plan that works = Product-Market Fit

It is not such a good news if you are one of the startups that are close to fail because you are running out of resources…

First question is when does a startup fail?
When the startup stops, so all founders stop with the startup,  it clearly fails. Till that time there is always hope…

But when to stop with your startup?

The most obvious is to stop the startup when the money is finished. But is it so obvious? Of course you need to live. If you have savings you can decide to live from your savings but this may just be moving the problem forward.

Some tips to continue when your startup almost fails, in other words runs out of money you reached following stages:

Product Market Fit
In case you reached product market fit, you have a plan that works (see quote). If you are running out of resources it is really a pity to stop because you only need to scale your business. Assuming your market is big enough to earn the investments back you are going to make to scale your business, the ‘easiest’ way to get cash is to look for an investor. Probably if you really reached Product-Market Fit you will find an investor but if you find only one you don’t have a good negotiating position when you are running out of cash. If you have more investors you can play it hard.

But you can also ask yourself if there are not other ways that you don’t have to take an (another) external party aboard. Maybe you can let your clients pay the way that it deliver faster the cash which they anyway will pay you. This way you can finance also to scale your business. Other way for scaling can be a partner model and more creative financial solutions are possible.

If you are not sure that you reached product market fit you can be almost sure you didn’t reach it. Hopefully you found a problem solution fit.

Problem Solution Fit
In case you reached problem solution fit it will be much harder to find an investor. The chance is big that your money is finished before you find the investor. Better is to first focus on how to get (more) cash out of your business. Hopefully generate cash will be enough to pay the ‘daily’ costs. Probably it will not be enough to live from as a founder so in the worst case you can work part-time. In the meantime look for a co-founder that can help with the work you aren’t able to do.


Problem Customer Fit
In case you reached problem-customer fit there is still a long way to go. Focus on generating cash. In the meantime look for a co-founder who shares your vision and is able to work minimal part time.

Non of this phases
In case you did not reached problem-customer fit but you believe in your vision then continue or start with Customer Development. It only cost you time to find problem customer fit.

Summarized, if you it is hard to find an investor or you don’t want to have an external party in your startup but you are running out of resources then:

  1. Customer Development till problem solution fit
  2. Focus on cash (as soon as your startup is cash positive the pressure is gone)

If you have questions how to bring this post in practice or you like to have a chat with me then please contact me via the contact form. I will be happy to help.

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