Negative cash flow

Negative cash flow is a state, not a verdict. A funded startup spending ahead of revenue is negative by design, and so is a seasonal business in its quiet months. What makes it fine or fatal is whether it is chosen and financed: chosen means the shortfall buys something specific, financed means the reserves cover the months until it stops.

The moment cash flow turns negative, runway becomes the number that matters, because cash divided by the monthly shortfall is the count of months the situation can continue. A company that knows that number is managing; one that does not is drifting.

The dangerous version is structural: costs above revenue with no mechanism that closes the gap, where each month simply repeats the last one with less cash. The test is to name the specific thing that ends it, a launch, a price change, a cost cut, and the date by which it must. If neither exists, the negative cash flow is not a phase, it is the trajectory.