36–My Company is in Trouble. What Should I Do? End of our 2 part episode - a podcast by Bertrand Schmitt & Nuno G. Pedro

"I am leading or involved in a company… and we are in trouble. What should I do?” In this episode, we share what do when you are in trouble and what to do if everything else fails. This is the second and final episode on this topic. For more information, also listen to episode 35

Navigation:Intro (01:34)
Section 1: What to do, if the company is in trouble? (02:04)Section 2: What if all else fails? (34:46)
Conclusion (47:21)Our co-hosts:

Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmittNuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture newsSubscribe To Our Podcast



Intro (01:34)Bertrand Schmitt

Welcome to Tech Deciphered Episode 36. It's our second episode about,"My Company's in Trouble. What Should I Do?"In the previous episode, we talked about the context. We talked about how to determine if your company is in trouble. And we talked about what being relatively safe looks like. In this episode, we are going to talk about what to do if your company is in trouble, as well as what are your options if all else is failing.

Section 1: What to do, if the company is in trouble?Nuno Goncalves Pedro

Let's say that actually, you are in trouble, that you've done the analysis, you're running out of cash quickly. Your economics are very poor. Your burn is difficult to turn around. What do you do? What is the first thing that you do?

Bertrand SchmittI think the first thing that you do is as management, as a board, to acknowledge you have an issue. That's really the first thing. Acknowledge you have an issue and then start working together, management and board of directors to get in agreement into what is, at the very least, what is our current situation, not even what we should do about it, but always a level of risk, level of tension. The analysis done of what's happening so that you can start smartly discussing about the option for the business.

But we saw an acknowledgement across a team of professionals, execs, and board of directors, it's very difficult to move forward. If one side believes a business is doing alright and there is no biggies, that's an issue. If one side believes that, hey, it's not that great in term of burn rate, but we would get financing easily. That's trouble if the other side doesn't believe that. And usually, that might be your board who doesn't believe it would be that easy to fundraise. I guess it depends.

But it's really key to be aligned about the analysis. I've seen companies, I think it's less true now, but if you look at in June or May that still we're not acknowledging what was happening in the market, it was crazy for me. It's like, guys, this has happened for six months now. You need to acknowledge it's a different economic condition and what was investable, and we go back to the default investable in November of 2021, is not default investable in September 2022. And the gap might be pretty big.

I can see that some people at the first bear markets really start to think, Oh, good times are back. No, no, they're not coming back. Not so easily. And you cannot build and bet your business just based on bet ready for a few weeks. Or both sides of the table need to come into agreement about the burn rate situation, the capacity of the company to deliver on its revenues and its projections of top line, specifically, but also about bottom line and get into agreement about what it means in terms of ability to fundraise.

Nuno Goncalves PedroAnd let's say we have agreement, so board, executives, everyone's like, we are in trouble.

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