Dear SaaStr: I am running out of runway and in our fundraise we so far have had no luck with termsheets. when is the right time to call it a day?
It’s tough, but here’s the reality: you call it a day when you’ve exhausted every reasonable path to survival and growth, and when continuing would be more destructive than constructive—for you, your team, and your investors.
Yes, wind things down in an orderly fashion. But if you still have a shot — leave nothing on the field.
Before you get there, let’s break this down.
First, ask yourself: have you hit the milestones that make you fundable?
Investors don’t fund hope, they fund traction, growth, and clear paths to scale. If you’re not getting term sheets, it’s likely you haven’t hit the metrics or milestones that make your business compelling. What are those milestones? Are they achievable in the time you have left?
Second, how much runway do you have?
If you’re down to less than 5-6 months, you’re in the danger zone. Fundraising takes at least 3 months, often more. If you’re not already in advanced discussions, you’re running out of time. Transparency is key here—communicate your zero cash date to your investors and stakeholders. If they believe in the business, they might help bridge you to the next stage. But you need a real, non-delusional plan to show them why it’s worth it.
Third, consider whether you’re in a position to “buy time.”
In my last start-up, Adobe Sign / EchoSign, we ran out of seed money. I had to take no salary for a year and more — and convince our largest customer to prepay for 2 years up front. It was just enough, barely. But it was enough. And we went on to exit for nine figures.
Can you cut burn dramatically to extend runway? This might mean layoffs, cutting non-core initiatives, or even going back to basics to focus on profitability. It’s painful, but survival often requires tough decisions. If you can’t see a path to profitability or a clear milestone that will unlock funding, then it might be time to step back 6.
Finally, be brutally honest with yourself: is this a business that can work?
If it is, find a way. But not every startup is destined to succeed, and that’s okay. Some of the best founders I know have had to shut down their first or second companies before finding massive success later. If you’re not seeing a path forward, it might be time to “cut bait” and move on to the next opportunity.
But don’t give up too soon. Too much Twitter advice suggests that. It’s supposed to be hard.
If I’d quit too soon, if Elon Musk quit too soon when he first rockets exploded or when Tesla was days from running out of cash, if Jobs gave up when he was fired by Apple … where we would all be?
So many of the best founders have these stories in the earlier days. When they almost went under. Almost.
If there’s even a sliver of a chance to turn things around—whether through a pivot, a bridge round, or a renewed focus on customers—fight for it. The best founders are relentless, but they’re also realistic.
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