10 Early Warning Signs Your Startup Is Failing Before Cash Runs Out
Want the checklist and the 48 hour plan? Read this page first.
The Cash challenge.
Cash problems are late-stage symptoms. The damage usually starts months earlier in places your P&L does not show: decision speed, trust, and operational discipline. Treat the runway as the scoreboard, not the game. These warning signs originate from founder talk tracks and investor threads, as well as the turnaround checklist we use in practice. Use them to spot trouble six to twelve months before the bank balance tells you.
How to use this list: for each sign, I give the real pain in their words, one metric to watch, and one move you can execute this week. Then, close with an FAQ and provide a way to obtain a free checklist, along with a quantified Recovery Odds Index.
1) Investors go quiet and replies slow down
When trust erodes, people delay. Investors answer later. Key customers keep “just reviewing” instead of renewing. That silence is a decision. The checklist frames this as a trust issue, not a funding issue.
Metric: average response time from key investors and customers. Track it weekly.
This week: name the risk in plain language, share one page on current facts, and ask for a yes or no on the next milestone date.
2) Your best people are interviewing elsewhere
You hear it second hand. Cameras off. Fewer ideas in meetings. A direct report “just taking a call.” Talent votes with their feet long before resignations.
Metric: regretted attrition risk list updated weekly.
This week: Meet the top five people one-on-one. Ask what would make them stay for six months. Act on one item within seven days.
3) No weekly cash tracking
This is the most common failure pattern across startups and SMEs. Teams run “profitable” on paper while invoices live their best lives unpaid. If you are not reviewing cash weekly, you are flying blind.
Metric: 13-week cash forecast owned by one person.
This week: switch to weekly cash reviews with a single page: cash in bank, burn, collections, top five payables, danger date.
4) Projects start and never finish
Work piles up. Nothing ships. One founder put a number on the cost: “missed out on over 138,000 in revenue due to a product bottleneck.” That is not a backlog problem. That is a survival problem.
Metric: percent of projects finished on time per month.
This week: kill two low-impact projects. Move those owners to close the most significant revenue leak or collections block.
5) Decision cycles slow from days to weeks
The board pack gets longer. Meetings become status, not strategy. People avoid hard calls and keep “gathering input.” In a crisis, slow beats bad. Slow losses.
Metric: average age of open decisions.
This week: Set a 48-hour rule for the top three decisions. One owner. One deadline. Default to action.
6) Board alignment breaks
Leaders contradict each other in front of the team. Priorities shift by the week. The founder starts managing up rather than leading. That gap destroys recovery odds.
Metric: a single written list of three priorities agreed by board and leadership, reviewed weekly.
This week: write the three. Share them. Ask for an explicit yes from the chair. Stop work that does not serve them.
7) Runway drops under 12 months with rising burn
Founders talk about 18 to 24 months as the stability zone. In practice, many run thinner. Under six months becomes near fatal for fundraising and hiring. One founder said it cleanly: “Running out of runway is a primary cause of demise.”
Metric: runway months, burn trend, and the date you hit six months.
This week: extend runway by cutting burn with one move that saves a whole month. Decide once, not in rounds.
8) Unpaid invoices grow and age
Positive MRR can still kill you if cash does not arrive. Unpaid invoices and churn-driven leaks starve the business. Founders focus heavily on stopping revenue leaks for a reason.
Metric: AR aging and DSO.
This week: call the top five late accounts. Offer simple payment plans. Freeze new work until paid. Assign one owner and report by the following Monday.
9) Strategy changes every quarter
If you cannot answer “what business are we in” the same way twice, you do not have strategic clarity. Roadmaps swing to please the loudest customer. Focus dies. So does trust.
Metric: number of strategic shifts in the last two quarters.
This week: write a one-page strategy and a one-page “not now” list. Share both. Protect them for 90 days.
10) Founder energy and health collapse
This is the quiet killer. Sleep goes. Anxiety rises. You avoid the office. Teams feel it first. Outcomes follow. The human toll is visible across communities, and it correlates with failure to execute.
Metric: your own energy score, tracked daily.
This week: remove one recurring obligation. Add one block for real work and one for sleep. Tell the team what you changed.
What to do this week if two or more signs show up together
Name the situation: one page, facts only. No spin. Share it with the board, leads, and key investors.
Cut decision time. Switch to a weekly operating rhythm. Three priorities. One owner per priority. Weekly cash and pipeline review.
Stabilize cash. Extend runway by at least one month in one move, not through drip cuts. Call late payers. Pause low-value work.
If you are already under six months of runway, assume the funding market is more complex than you expect. Many investors refer to the current climate as an investor recession. Plan with that in mind.
Short quotes you can use with your team
“Running out of runway is a primary cause of demise.”
“Missed out on over 1XX,000 in revenue due to a product bottleneck.”
FAQ
How can my startup be saved?
Score your situation across six domains: leadership alignment, decision speed, cash runway, stakeholder trust, operational discipline, and strategic clarity. If three or more are weak and the runway is under six months, you need immediate intervention. Use the free Early Warning and Bridge Round checklist to get a fast view, then take the Recovery Odds Index to get a quantified score and the next five moves.
When should I shut down a startup?
Shut down when your plan cannot produce twelve months of runway within thirty days, and you lack investor or board belief to bridge to a real milestone. If trust is gone, decisions are slow, and cash is under three months, a controlled wind-down can protect people and value better than a slow bleed. Document the facts and present the decision to the board, including dates and numbers.
Next step
Read the list here or download the free Early Warning and Bridge Round checklist and run it with your leadership team this week. For a quantified view, consider the Recovery Odds Index assessment. It is a 20-minute diagnostic that scores your performance across six domains and provides a priority action plan. The price is 199 euros. Use it to align your board on facts, not hope.