I’ve seen a lot of startups almost fail. Most of them don’t fail because the of the product. They don’t fail because the market wasn’t there. They almost fail because they ran out of cash.
And it almost always happens gradually, then suddenly. One day you think you’re fine, you’ve got 18 months of runway. Then you realize half your vendors are on net-60 terms, you’ve got a bunch of subscriptions you forgot about, and that “small” team expansion actually cost way more than you budgeted when you factor in equipment, software, and everything else.
Before you know it, your 18 months is actually 9 months, and you’re scrambling.
I learned this the hard way. But over the years, I’ve narrowed it down to two simple practices that have saved my ass more times than I can count. They’re not sexy. They’re not innovative. But they work.
1. Approve Every Single Check and Payment Yourself
Yes, every single one.
I still do this today, and I’ve been at this for a while now. Every invoice, every subscription renewal, every reimbursement, every vendor payment—it crosses my desk before the money goes out.
Now, I know what you’re thinking: “That doesn’t scale.” “That’s not what a CEO should be doing.” “You need to delegate.”
And eventually, yes, you’ll delegate. But not in the early days. Absolutely not in the early days.
Here’s why this matters so much:
You develop an instinctive feel for your burn rate. When you’re approving every payment, you’re not just rubber-stamping invoices. You’re seeing patterns. You notice when AWS costs spike. You see when someone adds another tool to the stack. You catch duplicate subscriptions. You understand, in your gut, where every dollar is going.
This isn’t something a dashboard can give you. This is tactile knowledge of your business.
You catch things before they become problems. I can’t tell you how many times I’ve caught expenses that didn’t make sense. The $5,000/month software tool that only two people are using. The contractor who’s billing for hours that don’t match the output. The office supply order that’s 3x what it should be because someone accidentally ordered 30 laptops instead of 3.
Sounds ridiculous? This stuff happens all the time. And if you’re not looking at every payment, it slips through.
You eliminate the “I thought someone else approved it” problem. In early-stage companies, there’s often confusion about who can approve what. Someone on the team thinks they have authority to spend $10,000 on a conference sponsorship because “it’s marketing budget” and they’re running marketing. But you never actually approved a $10,000 conference spend.
When everything comes through you, there’s no ambiguity. No one can spend money without your explicit approval. Period.
It forces prioritization conversations. When your team knows you’re going to see every expense, they think twice before requesting things. They prioritize. They ask themselves: “Is this really necessary right now?” And when they do come to you, they come prepared to justify it.
This is healthy. This is what you want in the early days when every dollar matters.
Now, I’m not saying you need to personally write every check or click every “approve payment” button until the end of time. Once you’re profitable, once you have real financial systems in place, once you have a CFO who knows what they’re doing—then you can delegate this.
But until then? This is your job. And it’s one of the most important jobs you have.
2. Manage to Cash In the Bank, Not to Budgets
Here’s the second thing: forget your annual budget. Forget your quarterly projections. Manage to one number and one number only: cash in the bank.
Specifically, look at cash out each month. Even better, look at it each week.
That’s your real burn rate. That’s your real runway.
Not what you budgeted. Not what you projected. Not what’s in your carefully crafted financial model with the beautiful hockey stick growth chart. What actually left your bank account this month.
I check this every Monday morning. First thing. Before I look at any other metrics. Before I check revenue, before I look at new signups, before anything else—I look at the bank balance and I calculate: how much cash went out last week? How much came in? What’s the net change?
Then I do the same calculation for the month. And I know, at all times, exactly how many months of runway I have based on actual cash flow, not projections.
Here’s why this is so critical:
Accrual accounting lies to you. Well, it doesn’t lie exactly. But it doesn’t tell you the truth you need to know as an early-stage founder. Your P&L might look great because you booked a bunch of annual contracts this month. But if those customers are paying quarterly, your cash position doesn’t match your revenue recognition.
Or the opposite: you might have a terrible-looking month on the P&L because you paid annual software licenses upfront, but your actual monthly cash burn is lower than it appears.
Cash is truth. Cash is what pays your team. Cash is what keeps the lights on.
It catches the creep before it kills you. Burn rate has a way of creeping up. You hire one extra person. Then another. Then you upgrade your office space. Then you add a tool here, another vendor there. Each decision seems reasonable in isolation.
But if you’re managing to budgets instead of actual cash flow, you don’t feel the pain until it’s too late. You think you’re “on budget” so everything must be fine.
When you’re watching cash go out the door every week, you feel it immediately. You see the number go up from $150K/month to $165K/month to $180K/month. And you ask yourself: what changed? Why is this happening? Do I need to make adjustments now?
It forces discipline around runway. When you know your exact cash position and your exact weekly/monthly burn, you know your runway. Not approximately. Exactly.
And when you know you have 14 months of runway instead of 18 months, you make different decisions. You might hold off on that next hire for a quarter. You might negotiate harder with vendors. You might push harder on sales to accelerate revenue.
This clarity is invaluable.
It makes you a better fundraiser. Investors ask about burn rate and runway in every single pitch. If you manage to cash in the bank, you can answer these questions with precision and confidence. You don’t have to fumble around with “well, according to our projections…” You know the numbers cold because you live them every week.
When You Can Stop Doing This
Eventually, you won’t need to do these things anymore.
When will that be? When cash doesn’t matter. When you’re profitable with strong margins. When you have so much money in the bank that even if burn increased 50% overnight, you’d still have years of runway.
At that point, yes, you can have a real finance team that manages to budgets and annual plans. You can have approval hierarchies where VPs can approve up to $X, directors up to $Y, and so on. You can look at your bank balance quarterly instead of weekly.
But here’s the thing: most founders get there much later than they think they will. And many never get there at all because they lose control of the cash before they reach that point.
The Real Risk: The Slow Spiral
The reason I’m so adamant about these two practices is because I’ve seen the alternative play out too many times. And it’s never a dramatic, obvious failure. It’s always a slow spiral.
It goes like this:
- Month 1: You delegate payment approvals to your head of operations because you’re “too busy” with product and sales. Burn stays about the same.
- Month 3: A few new tools get added that you weren’t aware of. Burn increases by $15K/month. Not a huge deal, you think.
- Month 6: You’ve hired 3 new people and they all need equipment and software. Burn is up another $40K/month. But you budgeted for the hires, so it seems fine.
- Month 9: You realize you’re burning $225K/month instead of the $150K you were burning at the beginning of the year. How did that happen? It feels like nothing major changed.
- Month 12: You have 8 months of runway instead of 15 months. You need to raise money sooner than you planned. But the product metrics aren’t quite there yet, and investors are spooked by your burn rate.
- Month 15: You’re scrambling to cut costs, but it’s hard because you’ve built a team and made commitments. Morale suffers. The best people start looking around.
- Month 18: You’re out of cash, you can’t raise, and you’re at the edge of shutting down.
This happens all the time. And it’s completely preventable if you just maintain control of the cash in the early days.
The Bottom Line
Running out of cash is the most common way startups die. And the insidious thing is that it rarely happens because of one big mistake. It happens because of a thousand small decisions that compound over time.
The two practices I’ve outlined here—approving every payment yourself and managing to actual cash flow—won’t guarantee you’ll succeed. But they will dramatically increase your chances of surviving long enough to find product-market fit, to grow, and to eventually build something real.
They’re simple. They’re unsexy. They take discipline.
But they work.
And honestly? If you’re not willing to do these things in the early days when your company’s survival depends on it, you’re probably not going to make it as a founder.
Cash is oxygen. Don’t let yourself suffocate because you were too busy or too proud to watch the air supply.
Stay focused on the cash. Everything else is commentary.
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