An article in the Wall Street Journal (dated Jan 18, 2007) is entitled, "Tech Start-Ups Have Money to Burn, But Choose Thrift."

Unlike the dot-come boom of the late 90’s, when VC-financed start-ups had burn rates in the millions of dollars per month (think Pets.com), today’s start-ups are taking a wiser approach.  According to the article, "tech-startups in Silicon Valley now survive an average of 17 months on a single round of funding" before needing another infusion, up from 10 months in 2000.

The article goes on to cite a number of reasons why this is so, including cheaper technology. But I think the biggest factor is that the mindset has shifted. Fiscal conservatism is in, after learning a hard lesson with the tech bubble bursting in 2001.

A couple of choice quotes:

" In the past, many people raised enough money to launch a product, but we’ve raised enough so that we can go through three iterations. [We’ve got] enough cash to last till 2009, even if it doesn’t generate revenue." –Munjal Shah, CEO of Riya, Inc.

"Cash is queen these days. Fiscal discipline is harder to teach later in the life of a company, and we want to be the last guy standing."  –Gibu Thomas, CEO of Sharpcast, Inc.

These concepts apply to individuals as well as companies. Last fall, I wrote an article, entitled, "8 Tips for a Successful Career Transition." The first tip?  Get your financial house in order. Your options are limited when there’s no cash reserve.

I can’t claim to have led the way on financial conservatism in my own life. I have my husband to thank for that. Thank god for partners who can see down the road a few steps.  It’s allowed me the time to build a business.  Yes, cash is queen.