Source: Insidesources

What You Should Do To Prepare For The Next Downturn

With the dot-com bubble burst, a lot of us have the perception that most of the dot-com companies went out of business and got liquidated. The truth is 48% of dot-com companies survived through 2004, albeit at lower valuations. One notable company that survived the dot-com bubble burst is Amazon.

Question is why many companies were able to endure the crash and many did not? For the companies that survived, what have they done differently?

Cash Is King But …

For many startup companies, it’s lifespan is measured by its burn rate, the rate at which it spent its existing capital. If we ask people how to prepare for the next high tech downturn, most people will probably say a strong cash position. But the problem is we don’t know when the downturn is coming and how long it will last? If the recession lasts much longer than the cash you have on hand, it won’t matter anymore. Read More...