John Doerr was interviewed by John Battelle at the Web 2.0 Summit today. It was a fascinating and far ranging interview with one of the top VC investors in the world. VentureBeat has a full rundown of the interview, but here is John Doerr's advice for startups, just the bullet points;
- Act now, get more financing from existing investors.
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Protect the vital core of the business. Be clear about what is core.
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Have 18 months of cash on hand based on a conservative revenue forecast.
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Defer all CapEx spending and large purchases
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Re-evaluate R&D priorities
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Renegotiate all contracts including rent. You will be surprised what can be renogitated for a lower price of better terms.
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Everyone in the company should be selling... Everyone!
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Offer equity instead of cash for everything.
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Secure your cash in T-bills. Money markets aren't safe enough.
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Figure out the leading indicators of your revenues so that you can react quickly if things get worse.
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Over-communicate. Don't sugar coat anything. Be honest and don't be afraid to say you don't know.
Good advice for any times, but especially now. Having enough cash on hand is the key thing. Look your investors in the eye and ask them if they are willing to put more money in now. Better to know now then to be caught by surprise later.
