Cashflows – When Less is More

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Funding is a crucial element for any company in the world. From large companies to startups, funding can make or break a company’s existence. Ironically, Funding acts as a double edged sword. Over funding and poor use / management of funding can lead to eventual failures too. There are several examples from the recent past, Dotcom bubble was built by bankers and financiers (like VCs, PEs) investing extreme amounts into early stage tech startup companies at insane valuations without really any proof of underlying business models or technologies. It lead to a big crash in 2000/2001 Subprime crisis was accumulated by bankers creating structured products on subprime loans without validating underlying asset quality and value. It lead to Credit crisis […]