Cash is King is the writing on the wall as everybody tries to extend their runway. At Blume, we got Ambarish Raghuvanshi, the seasoned wartime CFO of Infoedge, to share some learnings with our portfolio founders, based on his experiences of not one but three recessions.

But first a short story of resilience

Naukri had completed its IPO in 2007 after having lived the startup journey of evolving into a profitable company from a loss-making early stage company. This was right at the cusp of the Lehman Brothers crisis. Close on the heels of the Global Financial Crisis, the team locked away the proceeds of the IPO and continued to live off only the operational profits. They entered the crisis with 40-45% market share and reached 65% share by 2011. They cut all discretionary spend such as Marketing and doubled down on core work during the period. 

The lesson here for startups is that being young and small in a crisis keeps you under the radar. Use this as an opportunity to grow your market share by trying to become a part of the solution. Avoid less important spend and even if you are flush with cash, build like there will not be another fundraise. If you have 12 months of runway, try to extend it to 18 months! Assume bad times will last 50-100% longer (than industry expectations). Expensive CAC and branding should take lower priority now.

Get a CFO asap

Early stage startups often underestimate the importance of having a dedicated Finance head until they are pressured by investors. In fact, the advantages of having a CFO far outweighs the disadvantages of it. Being a CFO and co-founder himself at, Ambarish said that a CFO who is a naturalised team member will be able to identify core-noncore functions and take outsourcing decisions properly. Similarly, she / he will be able to take a lot of decisions with the company’s culture and historical context in mind.

Best time to restructure those CTCs!

Most costs are a function of number of customers and number of employees. While the number of customers pays for itself, companies should make sure the number of employees also pays for itself. Ambarish suggested that companies should try to make their expenses as variable as possible. In times like these, expenses locked in step with revenues could be a huge boon for companies. We tend to have results-linked commissions for the Sales function. There’s a strong case for expanding the compensation structure across other functions as well. When you will have the pay of 40-50% of your organization linked to revenues in one form or another, it will give rise to a much more robust appraisal culture.  Similarly, companies should aspire for as modular a cost structure as possible. All this underlines the massive impact, direct and indirect, that the headcount a company has. 

Take care of employees

These times are equally tough for employees as they are for companies. Companies should ensure that paydays are treated as holy and any glitches are anticipated and fixed in advance. Payment and appraisal cycles can be decoupled. In fact, companies may consider increasing the frequency of appraisals to ensure people are encouraged for their contribution and are not left to speculate their future in the company. They should also think twice before taking the route of furloughs since Indian talent market is not used to such a practice. Such steps may lead you to lose your key talent to other firms that are head-hunting currently. Organization-wide pay cuts are never a good idea and founders should figure out if there are groups where salary cuts will save the company the most money. 

Set the discipline with payments and stick to it

Each stakeholder is trying to watch their own. It’s important for companies to set SOPs regarding their credit and debit periods and stick to them. Companies with diversified client base are much better placed to stand their ground compared to companies with a concentrated client base. Similarly, don’t bully your vendors. You’ll get much better service if you pay your vendors on time. For enterprise clients requesting for discounts, companies should stand their ground. Providing deep discounts to their product dilutes the respect for their own product. They may experiment with making the package more attractive by throwing in some value-added services. 

Avoid Debt

Early stage startups should try to avoid debt. While debt is the cheapest form of capital, the tax-deduction benefits don’t kick in for loss-making startups and the unpredictable earning profile makes it difficult to repay commitments. Companies should take debt only in the worst-case scenario, and there too, make sure there is no recourse to the founder in any way. In response to the news floating around regarding loan moratoriums and tax deferrals, Ambarish recommended sticking to business-as-usual schedules. Often the implementation of such schemes may be so complicated that the delay won’t be worth the effort. Therefore, irrespective of how attractive the prospect of postponing GST / TDS payouts may seem, companies should try to pay statutory dues on time.

Take a good hard look at your finances

While looking at Cash Flow planning, people look at expenses the most, revenues not as much, and capex and deposits the least. These items sit in your balance sheet but go out of your cash flows. Companies should make sure they are maintaining enough cash for these. Also, if you dig deep enough in your business, you will surely find some fat. At least 10-30% expenses can be cut without even impacting manpower. Team should go through the trial balance line by line and identify potential liabilities and savings.


Ultimately, Ambarish’s biggest advise to founders is to communicate clearly with the team, the clients and the vendors. All stakeholders are nervous and frequent communication will ease nerves. Ambarish shared the fact with the larger Naukri team that the founders were foregoing bonuses and taking major cuts. It set the tone for the rest of the organization also.