A Founder’s Guide to Reducing Cash Drag (Post-Revenue Edition)

Introduction: For post-revenue start-ups, cash drag – the steady drain of cash through operating costs and inefficient spending – can be fatal. Around one-third of start-ups cite running out of money as a key reason for failure, and in today’s funding climate, capital efficiency is as critical as growth.

At JW Markets, we help founders extend their runway and strengthen their investment case by tackling the two largest levers of value creation and cash burn: people and capital. This guide outlines four key strategies, drawn from our direct experience, to help you reduce cash drag and build a more resilient, capital-efficient business.

1. Outsource Non-Core Functions to Stay Lean and Agile

A primary way to preserve cash is to outsource non-core or fluctuating functions rather than making premature full-time hires. Carrying the fixed cost of a salary, benefits, and equity for a role you may not need in six months is a significant and avoidable cash drain.

How JW Markets Adds Value: We help you determine the optimal engagement model for each role. Is this a permanent, interim, or consulting position? Is it executive or non-executive? By mapping your corporate strategy to the specific skills required, we identify which roles are truly core and should be hired in-house, and which can be effectively outsourced to conserve cash and maintain flexibility.

• Practical Application: We often advise clients to outsource functions like bookkeeping, HR administration, or specific technical projects initially. This allows the core team to focus on strategic work like product and sales. If an outsourced function proves to be crucial and stable over time, we can then help you bring a high-calibre permanent hire in-house with confidence.

2. Leverage Equity-Linked Incentives to Attract Top Talent

When cash is king, equity becomes your most powerful alternative currency. Offering stock options or other equity-linked incentives allows you to attract and retain mission-critical talent without inflating your monthly burn rate.

How JW Markets Adds Value: We don't just advise on this strategy; we live it. JW Markets frequently reinvests its own fees into client equity, demonstrating tangible belief in your venture's upside. This gives us unique credibility when helping you structure equity-based compensation packages for candidates.

We help you articulate the compelling risk/reward narrative to potential hires, ensuring they understand how their contribution directly links to shared success. Our experience allows us to identify candidates who are motivated by building something great and are therefore more receptive to a balanced cash-and-equity offer, allowing you to conserve precious capital.

3. Structure Advisor and Provider Fees for Alignment

How you pay for professional services can significantly impact your cash flow. Intelligent fee structuring ensures you aren't paying large sums for advice or services that don't deliver a tangible outcome.

How JW Markets Adds Value: Our commercial model is built around alignment and minimising client risk.

• Recruitment: Our headhunting services are provided on a success-only basis. You only pay a fee when you successfully hire a candidate we introduce. This ensures our incentives are perfectly aligned with yours from the start.

• Capital & Advisory: When assisting with fundraising or strategic projects, we tailor our compensation. This can range from a pure success fee for capital introduction to an equity-linked model (like growth shares) for ongoing advisory work. Our goal is always to structure fees so that our reward is tied directly to the value we deliver, not to draining your cash reserves.

This flexible, outcome-focused approach is a core tenet of our philosophy and a practical way for you to access high-calibre expertise without upfront financial risk.

4. Leverage JW Markets as Your Strategic Talent Partner

Hiring is one of the most expensive and critical undertakings for a growing company. Rather than viewing recruitment as a pure cost centre, the most capital-efficient founders treat it as a strategic investment.

How JW Markets Adds Value: We act as an extension of your team, providing deep recruitment expertise that goes beyond filling a vacancy. Our dual focus on people and capital means we understand how a single key hire can fundamentally improve your investment case and business performance.

• Free Recruitment Workstreams: For companies we are closely aligned with, we often provide free, advert-led recruitment to help you identify talent and learn your business first-hand.

• Strategic Headhunting: For mission-critical or niche roles, our headhunting service actively targets exceptional, passive talent you won't find through public adverts. We focus on hiring fewer, but better, people who materially improve outcomes.

• Network Access: Our team, with backgrounds in investment banking and accounting, provides access to a network of seasoned operators, industry veterans, and potential investors.

By leveraging JW Markets, you gain a partner dedicated to improving your team's quality and execution capability, thereby extending your operational runway and strengthening your position for future growth or funding.

Conclusion: Managing cash drag is about making strategic decisions with every pound. For post-revenue founders, the balance between growth and frugality is a challenge that can be turned into a competitive advantage.

The strategies outlined—outsourcing strategically, using equity intelligently, aligning provider fees, and treating talent acquisition as a strategic partnership—are not just theoretical. They are practices we help our clients implement every day.

At JW Markets, we source people and capital, together. Our goal is to help you build a capital-efficient business where every hire strengthens your financial position and every pound of expenditure is optimised for return. By focusing on these principles, you can extend your runway, reduce dilution, and build a more valuable and resilient company.