Demand's Rosenblatt: Preserve cash

Bambi Francisco Roizen · November 7, 2008 · Short URL:

Richard's experienced bankruptcy, and there's a way to avoid that - preserve cash

We've heard it time and again, and well, you're going to hear it again. This time from Demand Media co-founder and CEO Richard Rosenblatt, who's been an entrepreneur many times over, has succeeded and failed, and lived through downturns. 

"Get your costs as low as you can," he said, while we were both at the Web 2.0 Summit in San Francisco this week.

Richard started his first company - an online shopping mall - back in 1994, right after graduating law school, and has had a lot of success as an entrepreneur. He was the Chairman of MySpace, which he sold to News Corp for $580 million. Admittedly, Richard says he's had a lot of failures, including the time he tried to turn around when he was 32-years-old. DrKoop was on its way to losing nearly $150 million the year Richard came along. Eventually, it went into bankruptcy.

Too many people react too late, thinking they have time. Extend your runway, he said.

"Preserve your capital… this is the time, particularly if you’re looking... it's great to go into the next round showing your investor that you had great fiscal responsibility and that you understand the time around you... Show people you can make money without spending money."

On the positive side, Richard encouraged entrepreneurs to not be afraid. "Google emerged at a difficult dot-com crash," he said. "Use this downturn to your advantage."

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Bambi Francisco Roizen

Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.

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