Chapter 4

CASH, FINANCEABILITY, AND CONTROL

A company's financial health is determined by three factors:

• . Cash: the funds that the firm has on hand or can obtain rapidly (i.e., in less than three months)

  . Financeability: the company's ability to raise cash in the short term (i.e., in three months or longer) and in the long term (i.e., over the life of the firm)

  . Control: the company's ability (going substantially beyond simple financial control) to operate according to a plan that specifies income, spending, and overall results

The following sections examine these three determinants of a start-up's financial health and present the flaws and rules applicable to each one.

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