The mistake was made three years earlier
Nobody calls you early.
By the time someone like me is in the building, the company is in crisis and everyone in the room is looking at the last ninety days. The cash forecast, the collections, the headcount, the vendor who stopped shipping. All of that is real and all of it has to be dealt with. None of it is the reason you are there.
The reason you are there was decided years ago, usually by people who were doing well at the time.
What it looked like at CoinCloud
I joined to run financial planning and analysis and the crypto market softened between the offer and the start date, which is its own kind of welcome. Within two weeks half the staff was gone. The portfolio was about five thousand store locations, four thousand of them unprofitable.
The crisis looked like Bitcoin. Bitcoin went from about $60,000 to about $18,000, and if you were in that room you would have said, reasonably, that the price did this.
It didn’t. The price exposed it. Those four thousand locations were signed when capital was cheap and every location looked like a good location, on leases written for a volume assumption nobody revisited. We pulled machines out of thousands of sites and rebuilt the portfolio around the ones that worked. Volume kept falling and the company became profitable anyway — which tells you the problem was never volume.
It did not save the business. Litigation with the hardware supplier finished that, and I had argued from the first week that filing earlier would have left the owners better off. But the decision that put it there was a placement-and-lease decision made in a good year.
What it looked like at Skillz
Public company, burning $60 million a quarter when I arrived and $12 million after my first one.
The crisis looked like burn. Burn is a symptom. The product kept changing and every change shocked a customer base that had been built on the old one. I said so, repeatedly, to people who did not want to hear it, which is most of what the job turns out to be.
There was a second decision underneath it, and this is the one I think about. The twelve people who had done this work were gone before I got there, replaced by an outside firm. By the time the team was down to two, the company had no internal memory of its own numbers. You cannot see a three-year-old mistake if nobody in the building was there three years ago. Cutting the function that would have told you is itself the kind of decision I am describing.
Operating problems announce themselves. Financing problems wait.
The pattern
Across five of these the shape is the same. The company has an operating problem it can see and a structural one it cannot, and the structural one is almost always about money: how the thing was financed, on what terms, with what quietly assumed about the following twelve months.
An operating problem shows up in the numbers the week it happens. A customer leaves, a margin slips, a line goes down. Somebody notices.
A financing decision does not behave like that. It is made once, usually on a good day, and then it sits there being fine for as long as conditions hold. The lease is affordable at the volume you had. The covenant is comfortable at the margin you had. The balloon is twelve months out and there is a refinance market. Nothing in the monthly reporting flags any of it, because on the day it was signed it was defensible and nothing has changed except the world.
Then the world changes, and all of it arrives at once.
The useful version of this
I am not telling you to be gloomy about good years. I am telling you where to point the question.
When a decision about money comes up — a lease, a line, a loan, a buyout, a piece of equipment — the question that earns its keep is not what this does if things go well. You already know that; it is why the decision is on the table. The question is what this leaves you standing on if you are wrong about the next twelve months. Not whether you survive. What you are still holding.
If the answer is a building you own, a payroll that clears from operations, a customer base that did not depend on the thing you are about to change — you have room. If the answer is that the structure only works if the forecast does, the forecast is the structure, and you have bought a problem that will not appear in a single monthly report until the quarter it ends you.
That is the whole of what five turnarounds taught me, and it is why I underwrite the way I do. I would rather have that conversation with somebody three years early, when it is cheap and slightly annoying, than be the person who arrives afterwards to tell them what the file already said.
If you want what BuildUp Capital offers, start there. Or tell me about the company.