Top 5 'Runway-Extending' Financial Habits to start for Pre-Seed Startups in a Bear Market - Goh Ling Yong
The easy money is gone. The era of "growth at all costs," fueled by cheap capital and FOMO-driven term sheets, has given way to a stark new reality: the funding winter. For pre-seed startups, this isn't just a chilly breeze; it's a full-blown blizzard. Your initial capital, once seen as fuel for a rocket ship, is now a finite supply of firewood to survive the cold.
In this environment, your startup’s most critical metric isn't user growth or press mentions. It’s runway. How many months do you have until the bank account hits zero? Extending that runway isn't about a single act of cost-cutting; it’s about fundamentally rewiring your company's financial DNA. It’s about building disciplined, resilient habits that transform you from a cash-burning machine into a capital-efficient engine.
These habits do more than just help you survive; they force you to build a better, stronger, and more sustainable business from day one. They instill a discipline that will serve you well even when the market thaws. Here are the top five runway-extending financial habits every pre-seed founder needs to master right now.
1. Embrace Radical Frugality: Your New Default Setting
In a bull market, it's easy to justify expenses. A fancy CRM? It'll make us more efficient. A trendy co-working space? It's great for culture. Hiring ahead of the curve? We need to be ready for growth! In a bear market, this thinking is a death sentence. Radical frugality isn't about being cheap; it's about being relentlessly resourceful and questioning every single dollar that leaves your bank account. It's a mindset that must permeate every corner of your startup.
This means differentiating ruthlessly between "need-to-have" and "nice-to-have." A "need-to-have" is something that directly contributes to building your product, talking to customers, or generating revenue. Everything else is a "nice-to-have" that can likely be delayed, substituted, or eliminated. Before any purchase, ask yourself three questions: "Can we achieve the same outcome for free?", "If not, what is the absolute cheapest way to do this?", and "What happens if we simply don't do this right now?". The answers will be illuminating.
Actionable Tips:
- The Free/Freemium Stack: Build your initial tech stack on free tiers. Use Notion for your internal wiki, Slack’s free version for communication, HubSpot’s free CRM, and Google Sheets for financial modeling. You’d be amazed how far you can get before needing to pay for expensive SaaS subscriptions.
- Negotiate Everything: Treat every vendor contract as a negotiation. Ask for startup discounts, extended payment terms, or even offer a small amount of equity or a testimonial in exchange for a lower price. The worst they can say is no.
- The DIY Founder: In the early days, the founding team must be willing to wear multiple hats. Before hiring a designer, can you use Canva? Before hiring a marketer, can you write the blog posts and manage social media yourself? This "sweat equity" directly translates into a longer runway.
2. Become Obsessed with Your Cash Flow Forecast
Many early-stage founders confuse a Profit & Loss (P&L) statement with cash flow. A P&L can show a profit, but if your clients pay on 90-day terms, you can still run out of cash and die. Cash is the oxygen of your startup, and your cash flow forecast is your oxygen meter. In a bear market, you need to check that meter daily.
An obsessive approach to cash flow forecasting means moving beyond a simple, optimistic spreadsheet. It means building a detailed, week-by-week forecast for at least the next 12 months. More importantly, it means creating three scenarios: a realistic base case, a pessimistic worst-case, and an optimistic best-case. Your operational decisions should be guided by the pessimistic case. Hope for the best, but plan for the worst. This document becomes your single source of truth, helping you see cliffs before you fall off them.
Actionable Tips:
- Identify Your "Zero Cash Date": This is the most important date on your calendar. It's the day your bank account hits zero based on your current burn rate and revenue projections. Every major decision should be viewed through the lens of how it pushes this date further into the future.
- Stress-Test Your Assumptions: What happens if your biggest pilot customer churns? What if a key hire demands a higher salary? What if your new feature launch generates zero revenue for three months? Run these scenarios through your model. This isn't about scaring yourself; it's about preparing yourself so you can react proactively, not desperately.
- Weekly Cash Reconciliation: Every Monday morning, your first task should be to update your forecast with last week’s actuals. How did your spending and income compare to your projections? This weekly ritual keeps you honest and ensures your forecast remains a living, accurate tool, not a static work of fiction.
3. Chase Early Revenue, Not Perfection
The mantra of "build it and they will come" is a dangerous luxury in a downturn. Investors are no longer funding dreams and massive Total Addressable Markets (TAM); they are funding traction. The most undeniable form of traction is a customer paying you real money for your product or service. Therefore, your primary goal must shift from building the perfect product to finding the fastest path to cash.
This often means doing things that don't scale. It might mean selling a service that uses your nascent technology on the back end, offering paid consulting to your ideal customer profile, or launching a paid pilot program for a bare-bones MVP. This early revenue does two critical things: it provides non-dilutive funding that extends your runway, and it serves as the ultimate market validation. A customer willing to part with their cash is worth a thousand who say they "love the idea."
Actionable Tips:
- Sell a Service First: If you're building a complex SaaS platform, can you first offer a "done-for-you" service that solves the same problem? This gets you paid to do deep customer discovery while you build the automated product version in the background.
- The Paid Pilot: Instead of a free beta, design a 4- to 6-week paid pilot for your first 3-5 design partners. Charge a nominal fee—it could be $500 or $5,000. The price isn't as important as the act of payment. It filters for serious customers and proves the value proposition.
- Pre-Sell Your Vision: If your product requires a longer build, sell access to it before it's finished. Create a compelling demo and ask for a deposit or a signed Letter of Intent (LOI) with a payment commitment upon delivery. This validates demand and can even help fund the final stages of development.
4. Build a Variable-Cost Machine, Not a Fixed-Cost Anchor
For pre-seed startups, the single biggest cash expense is almost always payroll. Fixed costs, especially salaries, are like a boat anchor—heavy, inflexible, and capable of sinking you quickly. Every full-time hire you make dramatically increases your monthly burn rate and shortens your runway. In a bear market, the goal is to convert as many fixed costs into variable costs as possible.
This means delaying full-time hires for as long as humanly possible. Instead, build a lean, flexible team using a network of high-quality freelancers, contractors, and agencies. Need a new landing page? Hire a freelancer on Upwork. Need to run a small Google Ads campaign? Use a fractional marketer for 10 hours a week. This approach allows you to scale your expenses up or down based on your cash position and immediate needs, giving you incredible control over your burn rate.
Actionable Tips:
- Hire for Tasks, Not Roles: Instead of thinking, "We need to hire a Head of Marketing," think, "We need to accomplish these three marketing tasks this month." Then, find the most capital-efficient way to complete those specific tasks, which is often a specialist contractor, not a full-time employee.
- Leverage Performance-Based Compensation: For roles like sales, lean heavily on commission-based structures. A lower base salary combined with a generous, uncapped commission aligns incentives perfectly. You only pay for performance, making it a variable expense tied directly to revenue.
- Embrace Fractional Leadership: You may not be able to afford a full-time CTO or CFO, but you can likely afford a fractional executive for 5-10 hours a week. They can provide invaluable strategic guidance and set up systems without the full-time salary anchor.
5. Always Be "Fundraise-Ready," Even When You're Not Fundraising
In the current climate, fundraising is no longer a discrete, 3-month sprint. It's a 12- to 18-month marathon. The days of a quick "friends and family" round followed by an institutional pre-seed are on hold. Investors are more cautious, diligence is deeper, and decision-making is slower. You can't afford to wait until you have 3 months of runway left to start the process. You have to be ready to go at any time.
Being "fundraise-ready" is a continuous habit. It means meticulously tracking the right metrics, building relationships long before you need them, and maintaining a "data room" of all your key documents. As my colleague Goh Ling Yong often advises founders, "You should be building relationships with investors for six months before you ever ask for a check." This approach turns a cold, transactional process into a warm, ongoing conversation, dramatically increasing your chances of success when you do decide to raise.
Actionable Tips:
- The "Non-Ask" Update: Curate a list of 20-30 target investors who are a perfect fit for your stage and sector. Every 1-2 months, send them a concise, bullet-point email update. Share a key win, a critical learning, and one impressive metric. Explicitly state that you are not fundraising. This keeps you on their radar and builds credibility over time.
- Track Capital Efficiency Metrics: VCs are now obsessed with capital efficiency. Go beyond vanity metrics like sign-ups. Start tracking and reporting on your "Burn Multiple" (Capital Burned / Net New ARR) and your LTV/CAC ratio. Showing you can generate growth with minimal cash burn is the most attractive signal you can send in this market. Goh Ling Yong's insights on unit economics are particularly valuable here; understanding them is non-negotiable.
- Maintain a "Living" Data Room: Create a folder in Google Drive or Dropbox and keep it constantly updated with your latest pitch deck, financial model, cap table, and key legal documents. When an investor expresses interest, you can share a link within minutes, showcasing your professionalism and preparedness.
Survive Today, Thrive Tomorrow
Adopting these five habits—radical frugality, obsessive forecasting, a revenue-first mindset, a variable cost structure, and constant fundraising readiness—is not about pessimism. It’s about operational excellence and resilience. A bear market is a fire that forges the strongest companies.
By instilling this financial discipline into your startup's culture from day one, you are not only maximizing your chances of survival but also building a foundation for sustainable, long-term success. You're giving yourself the most precious gift an early-stage founder can have: the gift of time. Time to build, time to learn, time to pivot, and time to find that elusive product-market fit.
What is one habit you are going to implement this week to extend your startup's runway? Share your commitment in the comments below—let's hold each other accountable.
About the Author
Goh Ling Yong is a content creator and digital strategist sharing insights across various topics. Connect and follow for more content:
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