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Don’t Drive Off the Cliff: Use Your Cash to Your Advantage
Spencer Rascoff
andSpencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
Wil Chockley
WIl Chockley is a partner at 75 & Sunny, where he evaluates potential investment opportunities across sectors and works with founders to build their strategy and execute on their vision.
What’s the best way to land a plane on a short runway? Maintain control of your descent. The same logic holds for early- to mid-stage startups that are facing harsh financial conditions in 2023. Research from the end of last year found that 81% of early stage start-ups have less than 12 months of runway left. Yikes. Pair that with the current post-SVB venture investment freeze, and it paints a stark picture of what’s ahead.
A huge number of companies are going to be scrambling to find the emergency exit this year, as macro conditions make growth more challenging, and a dearth of venture capital means you need to move more quickly than ever.
If you’ve been grinding on your startup for years and haven’t found product/market fit, you have a critical decision to make now that capital is hard to come by.
You can keep doing what you’ve been doing, pivoting and hoping to find product/market fit. Eventually you’ll need a new source of capital to keep the lights on or a strategic acquirer when you’re at the end of your runway. You could also shut down the company and return cash to your shareholders. There is another option, though. You can flip your mindset and think like an investor to give yourself a more graceful landing.
Imagine, for example, a Series B stage startup with $20 million of cash, but burning $2 million a month. The company has 10 months of runway, is not likely to be able to raise a Series C, and does not yet have a path to profitability with its current business model. Instead of continuing with the current path and driving off the cliff when the 10 months are up, the company might consider cutting burn to almost zero, and sitting with its $20 million of cash.
In this hypothetical scenario, the startup could then try to find another company to merge with, providing its intellectual property, its user base, whatever team members remain, and most importantly its cash, as consideration (and leverage) in the merger. The $20 million of cash is something other companies want desperately in today’s market. Rather than driving off a cliff into a complete winddown or a small acquihire, this company could end up owning 25% of some other company, providing a clear path forward and a real chance at redefined success.
If you find resonance in this cautionary tale, remember: there are a lot of great potential acquirers out there who have found product/market fit and are scaling rapidly, but still can’t raise a venture round in today’s economic climate. These companies are looking for cash wherever they can find it. Said another way, they might have product/market fit but not enough cash, and you have cash but no product/market fit. Seems like a decent marriage, right?
If you’re a founder with cash on your balance sheet but no path forward, you have a unique opportunity to think of yourself as a venture capitalist and “invest” your company’s cash and equity into a new business.
So how do you do this? The key is to move fast and preserve your cash.
- Bring in the board. Have a frank discussion with your board and lead investors to decide if it’s time to call it quits. Most investors have seen a number of companies wind down or go through M&A exits, so they can be a great sounding board as you chart a path forward. They can also be great leads for potential acquirers and facilitate introductions.
- Slim down. In order to preserve your greatest asset—your cash—you unfortunately need to reduce burn everywhere you can including marketing, software spend, and headcount. Ideally, your ongoing costs should be minimal.
- Make a list. Think of all the companies in your space who could see acquiring your company as a good strategic move. Who do you respect most in your industry? Are they in a position to grow, and could this move turbocharge that growth? Who might benefit from the expertise on your team?
- Start the conversation. Once you’ve brainstormed, mine your contacts for warm intros and begin talking about your collective options. The M&A process can take a long time, so the sooner you get moving, the better.
- Negotiate terms and make your decision. Once you nail down the options, it’s up to you to decide whether or not a deal is the right move. Hopefully you can work with your acquirer and your investor base to find a good outcome for everyone involved.
If your startup is one of the many with cash in the bank but without a clear path to a next financing round, don’t panic. Now could be the chance to reimagine your best case scenario—invest your cash to find a new home for your company.
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Spencer Rascoff
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
Wil Chockley
WIl Chockley is a partner at 75 & Sunny, where he evaluates potential investment opportunities across sectors and works with founders to build their strategy and execute on their vision.
https://twitter.com/spencerrascoff
https://www.linkedin.com/in/spencerrascoff/
admin@dot.la
AirMap Will Help The FAA Design Its New Drone Tracking System
04:43 PM | May 06, 2020
Santa Monica-based drone operations company AirMap is among eight companies selected to help the Federal Aviation Administration establish technical requirements for Remote ID, a protocol that drones will be required to follow for broadcasting identification and location data while in flight.
The other companies include Airbus, Amazon, T-Mobile, Intel, OneSky, Skyward and Alphabet's drone subsidiary, Wing.
"The FAA will be able to advance the safe integration of drones into our nation's airspace from these technology companies' knowledge and expertise on remote identification," Transportation Secretary Elaine Chao said today in a news release.
Today's announcement comes months after the FAA put out a set of draft regulations and a request for information relating to Remote ID.
Remote ID would require drone manufacturers to make their products capable of sending out ID codes and location data during operation in national airspace. The rules would apply to all drones heavier than 8.8 ounces, and manufacturers would have to comply two years after the regulations take effect. Drone operators would have three years to phase out non-complying devices.
Drones without the Remote ID system could be flown only within special FAA-designated zones — usually the same sorts of places where hobbyists fly model airplanes.
Remote ID system proposed for drones in U.S. airspacewww.youtube.com
The eight companies named today will advise the FAA on the technical standards and radio frequencies that would support the Remote ID system. Those specifications will be announced when the FAA publishes its final rule on Remote ID. Then the FAA would begin accepting applications for entities to become Remote ID suppliers.
Assuming the process develops as the FAA envisions, Remote ID would become a fact of life for drone operation — and for enforcement of the rules governing drone operation. Nearly 1.5 million drones and 160,000 remote pilots are now registered with the FAA, and analysts say Remote ID could turn into a market generating $1.5 billion a year by 2029.
Seattle-based Amazon and Wing are already well-known for their work on drones designed for package delivery. Airbus has its own delivery-drone program known as Skyways. Intel, meanwhile, has been building drones optimized for remote monitoring. Several FAA-approved pilot projects are testing Intel's drones as well as Intel's Bluetooth-enabled identification system, known as Open Drone ID.
AirMap, OneSky (a business unit of Analytical Graphics Inc.) and Skyward (a Verizon subsidiary) are working on traffic management systems that are optimized to keep track of drone operations.
T-Mobile has been providing the connectivity for at least three pilot projects involving drones, and is looking to expand its involvement in the drone industry with the rise of 5G networks.
Not everyone is happy with the FAA's proposed plan for Remote ID: DJI, one of the world's largest drone manufacturers, sounded off about its objections in a January blog posting.
"DJI wants governments to require Remote ID for drones, but the FAA has proposed a complex, expensive and intrusive system that would make it harder to use drones in America, and that jeopardizes the success of the Remote ID initiative," said Brendan Schulman, DJI's vice president of policy and legal affairs. "Instead, we support a simpler, easier, and free version of Remote ID that doesn't need a cellular connection or a service subscription."
Will the FAA's new technology partners come up with a different plan, or stick with the system as proposed? Stay tuned.
This story first appeared on GeekWire.
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Alan Boyle, GeekWire
GeekWire contributing editor Alan Boyle is an award-winning science writer and veteran space reporter. Formerly of NBCNews.com, he is the author of "The Case for Pluto: How a Little Planet Made a Big Difference." Follow him via CosmicLog.com, on Twitter @b0yle, and on Facebook and MeWe.
Tinder, Starlink, and Apple’s New Studio: This Week in LA
10:27 AM | July 04, 2025
🔦 Spotlight
Happy Independence Day, Los Angeles! 🇺🇸
While you're celebrating freedom, here are some electrifying updates lighting up LA’s tech, satellite, and music scenes:
🔥 Tinder mandates Face Recognition in California
Image Source: Tinder
Tinder is now requiring all new users in California to complete a biometric face check, a brief video selfie processed via FaceTec, to verify profiles are genuine. The video is deleted post-verification, though an encrypted face map remains while the account is active. This West Hollywood based move could redefine trust, safety, and privacy in mainstream consumer apps.
🌐 Starlink clears hurdle to launch in India
Elon Musk’s SpaceX backed Starlink has cleared most regulatory and licensing hurdles with India’s Department of Telecommunications, marking a key step toward launching satellite broadband in one of the world’s fastest growing markets. Final approvals from the national space regulator are pending, and services, expected to deliver high speed connectivity to underserved regions, could launch in the coming months. This is a major milestone for Starlink’s global expansion.
🎧 Apple Music opens Culver City creative hub
Image Source: Apple
Apple Music is celebrating its anniversary by launching a brand new 15,000 square foot, three story studio in Culver City. The facility, featuring a 4,000 square foot soundstage, spatial audio suites, podcast booths, and more, is designed by Eric Owen Moss and slated to open mid August. It solidifies LA’s reputation as a creative powerhouse and reaffirms Apple’s commitment to investing in and nurturing our city's cultural ecosystem.
From dating apps to deep space to sound stages, LA isn’t just watching the future unfold, we’re building it.
Here’s to independence, imagination, and everything this city dares to launch next. Happy Fourth, Los Angeles.
🤝 Venture Deals
LA Companies
- Castelion has raised a $350M Series B round led by Lightspeed Venture Partners alongside Altimeter Capital to scale its hypersonic missile production capabilities. The El Segundo-based defense startup plans to use the funds to expand manufacturing, accelerate testing through its SpaceX-inspired rapid development model, and position itself as a cost-effective supplier of hypersonic weapons to the U.S. military and its allies. - learn more
- Earth Sama, a Calabasas, California–based climate-tech platform that helps rural farming and Indigenous communities generate and manage carbon credits, secured investment from Omtse Ventures. The funding will support the rollout of Earth Sama’s blockchain-powered field app, climate-creator platform, and smart-contract tools to scale community-led carbon credit projects globally under the Paris Agreement’s Article 6.4 framework. - learn more
LA Venture Funds
- Plassa Capital participated in Metafide’s $3.275M funding round. Miami based Metafide, the creator of SURGE, a gamified trading platform that combines AI neural networks and human insight, will use the funds to scale and launch SURGE into the market. - learn more
- BOLD Capital Partners participated as a founding investor in Syntis Bio’s $33M Series A round, with an additional $5M in NIH grants. The Boston-based biotech is developing oral therapies for obesity and rare diseases, and the funding will help advance its SYNT platform, moving its lead obesity treatment, SYNT-101, into Phase 1 trials and supporting development of SYNT-202 for homocystinuria. - learn more
- BAM Ventures participated in Cred’s $15M seed round for its predictive intelligence startup. San Francisco based Cred uses AI to unify company data with real time market signals and deliver actionable insights for sales and operations. The funding, led by defy.vc, will be used to scale Cred’s platform, expand its customer base, and grow team and product capabilities. - learn more
- BOLD Capital Partners participated in Gallant’s $18M Series B round to advance its ready-to-use stem cell therapies for pets. The funding, led by Digitalis Ventures with additional support from NovaQuest Capital, will help Gallant bring its off-the-shelf regenerative treatments to market. - learn more
- Rebel Fund joined the seed round for Rocketable, contributing to the $6.5M raised to build a portfolio of fully automated SaaS companies. San Francisco-based Rocketable, backed by True Ventures and others, uses AI agents to operate acquired software products, and Rebel’s support will help scale both the platform and acquisitions. - learn more
LA Exits
- Leasepath, a cloud-first provider of equipment lease and loan management software, has been acquired by Solifi to enhance its mid-market offerings. The deal allows Solifi to expand Leasepath’s Microsoft Dynamics-based platform into new global markets while keeping Leasepath’s team and leadership in place. - learn more
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