Building a startup: The importance of cash management
Building a startup can be difficult, especially during multiple, ongoing economic headwinds like high inflation and record interest rates. But with inflation cooling and the Federal Reserve starting to forecast rate cuts, founders may have hope on the horizon for 2024. Jason Mok, Brex Head of Startups, joins Yahoo Finance to discuss what potential founders need to keep in mind for building their startups.
Mok discusses learning from Silicon Valley Bank collapse: "As we acknowledged in our report, the big thing was, one, capital preservation and so... a lot of founders did not, and it goes ebbs and flows, did not really come prepared to deal with something like this. Especially for early stage founders, many don't have cash management strategies in place. A lot of learning as it came out of that was one, aligning with your board and leading investors on what your cash management strategy might be. Then having, in order, the idea of capital preservation, making sure that you're preserving the dollars invested in you and you have access to that and making sure you're thinking you're aligned with an institution, FDIC insured."
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Video Transcript
JOSH LIPTON: It's been a tough year for startups, burgeoning companies contending with record inflation, high interest rates, and a tough fundraising environment. But our next guest says there's hope on the horizon for the new year. For more, we turn to Jason Mok, head of startups at Brex.
So Jason, thank you so much for joining us. And maybe before we get to your outlook for 2024, certainly plenty of lessons learned in 2023. A few different ways we can start here, Jason, maybe certainly we can look at SVB, the collapse of Silicon Valley Bank. When you think about that drama, I know it seems like 10 years ago. But when you think about it, what are some lessons learned, you think, for founders listening right now?
JASON MOK: Well, first of all, thank you, Julie and Josh for having me. Appreciate it. Yeah, it's crazy to think about it. I mean, yeah, it feels like forever ago, but reality was it was, what, 10 months ago.
And so there were a lot of learnings. But as we acknowledged in our report, the big thing was, one, capital preservation. And so one, a lot of founders did not-- and it goes in ebbs and flows, but did not really come prepared to deal with something like this. And so especially for early-stage founders, many don't have cash management strategies in place.