Ofcourse it is an oversimplification but it really is that simple.
If the business is profitable, it will survive.
If its still relying on free money to pay the bills, its time to make it profitable.
If the business is profitable, it will survive.
If its still relying on free money to pay the bills, its time to make it profitable.
The most bestest startup in the world would still be relying on investor's money to pay the bills if it's just starting to build its product and the time to make it profitable will come in a year or two or more (e.g. a biotech startup can take many, many years until the product gets approved for patients and earns its first cent).
Yes, if a business has "grown up" from being a startup and is fully self-funding not only its operations but also its growth, then it will survive, but the definition of a startup is something that's still trying to reach that stage and isn't there yet.
For the past 10 years or so none of the "successful wrothwhile startups" have positive cash flows, and those that seemingly do still manage to post hundreds of millions of dollars in losses yera after year after year.
The whole modern startup business is either "work at a loss until a successful exit for the founders" or "work at a loss forever with no expectation of profitability for some reason".
None of them are worthy.
A start-up that fails because of this mismanaged their treasury, didn’t pull money in time, couldn’t borrow against their claims and couldn’t convince anyone to advance payroll. That’s reflective on leadership. It’s a teachable moment. But it points to deeper naivety.