ABSTRACT
The new venture needs to start out with the assumption that its product or service may find customers in markets no one thought of, for uses no one envisaged when the product or service was designed, and that it will be bought by customers outside its field of vision and even unknown to the new venture. Suppose that a new venture has successfully launched its product or service and is growing fast. It reports “rapidly increasing profits” and issues rosy forecasts. Entrepreneurs starting new ventures are rarely unmindful of money; on the contrary, they tend to be greedy. A growing new venture should know twelve months ahead of time how much cash it will need, when, and for what purposes. With a year’s lead time, it is almost always possible to finance cash needs. The new venture has successfully established itself in the right market and has then successfully found the financial structure and the financial system it needs.
