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In this webinar, we gathered experts from Aspire and Qapita to share tips and tricks in cash flow management – a heavily underappreciated pain point and priority for many startups.
In case you missed it, here is a roundup of three key takeaways from the discussion.
Have full visibility and control over cash expenditures as you scale
Cash is often thought of as a natural byproduct of business creation. In reality, cash generation and cash flow management requires a lot of intentional intervention. According to Thomas Jeng, Head of Sales at Aspire, cash buys you leverage for growth, which in turn helps your startup beat the competition once it finds product-market fit.
Thomas recommends closely matching cash flow management in startups to stages of fundraising. He suggests that during fundraising phases, founders should adopt a conservative approach to cash flow management. During periods of high-growth, founders should be prepared to deploy cash with a very high ROI. In order to maintain control, it is important to have at least a thesis of how much additional runway your expenditure of cash will generate across all business functions.
Use equity compensation to preserve cash resources at the early stages
In the early days, it can be challenging for startups to attract and retain good talent with attractive compensation packages whilst maintaining their cash resources. Hence, Esha recommends using ESOPs in the form of partial salary. Esha recommends utilizing these long term incentive plans to not only maintain cash as a resource for new-age startups, but also make new talent feel instrumental to the company’s success.
Empower your team to scale by leveraging technology
In today’s flourishing tech ecosystem, automated tools can be crucial in empowering employees to accelerate achievement of planned business milestones. Thomas shared how Aspire’s corporate cards not only eliminate the need to get reimbursement or permission from finance for incremental claims, it allows employees to take ownership over their own pool of budget and drive their business function forward.
Esha also explained how the motivation behind growing equity value can be utilized for the startup’s benefit through clear and frequent communication from founders and access to wealth management platforms like Qapita that help employees take control of their entire ESOP process.
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