Why start-up founders run short of money

Dr Prem Digital Healthcare Marketing

“Do not ask me for money. I am a Start-up Founder!” This line is what most of the amateur start-up founders say. Some things just do not work in their favor and they run out of money. Despite having a good idea and product, the companies just do not happen to make it. Founders end up exhausting their money at quite an initial stage. Here are the top reasons that make start-up founders run short of money.

 Frequent Business Trips:

The start-up founders are frequent travelers. As in, they travel somewhere new every week as a part of their business trip. Their business meetings make them go round the world. Such busy travelling schedules make them dog-tired, thus, they ensure to book most luxurious hotels at their meeting destinations so that they experience a comfortable business trip. The amateur founders end up spending the funds rose for business development purposes on their life of luxury.

Solution: One can escape these extravagant expenditures if one plans the meeting trips efficiently. Entrepreneurs should go by a “day trip” rule, so that after meeting gets over, one can always return to home, thus, saving the hotel stay expense.

Risk Avoidance Nature of Entrepreneurs:

New founders generally try to play safe and escape from risks. They are not up for spending and they opt for everything cheap. They tend to let go of opportunities just because they are expensive. This kind of behavior puts them in the bad books of the clients and the investors, making them loose excellent opportunities. They are more concerned about the money in bank, which is like a backup for them.

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Solution: Rather than holding onto the bank deposits and letting go of the opportunities, the entrepreneurs should aim to create healthy budgets taking help of the advisors.

Lavish marketing spend:

Success of a start-up calls for a celebration. There is nothing wrong with it until the celebration involves a moderate amount of expenditure. It goes for the promotional stunts done by various entrepreneurs like overspending on trade shows and fancy promotional videos much before the right time. Sometimes start-ups plan evenings with open bars and flaunt various other things as well while failing to realize its result.

Solution: Many start-ups exhaust their wealth over marketing spends. The written plan about their marketing spends is the best way to escape over expenditure.

Unnecessary Hiring of Salespeople:

A founder should be able to sell his product himself before hiring others to sell his product. Managing a sales team without trying your hand at the sales process only makes you disconnected from your product, and will frustrate future early sales employees.


Get rid of the psyche that hiring sales employees would improve your start-up sale. If you cannot sell your product, nobody else can.

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