I was sitting at my desk in late 2024 looking at two numbers that didn’t make sense together.

Monthly GMV: $500K and climbing fast.

Cash runway: Three months.

We were growing. We were winning major enterprise clients. And we were about to run out of money.

The Gap That Almost Killed Us

Here’s what I didn’t understand as a first-time founder: revenue and cash operate on completely different timelines.

At PartRunner, we pay our drivers within 7 days. That’s our value proposition—we’re the only ones in the market promising faster payments. It was a non-negotiable value add for our fleets and drivers. But our enterprise clients? They pay in 30 to 90 days.

We were essentially financing our clients’ operations while our bank account bled out.

The math was brutal. We had $650K in the bank and were projected to hit $750K in monthly GMV within three months. Most founders would celebrate that growth. I was terrified of it.

That $250K increase in GMV meant a $500K cash deficit because customers would pay two months later. Once you drop to $100K-$200K in cash flow, you’re one delayed payment away from zero.

When Convoy Collapsed, I Saw Our Future

Around the same time, Convoy—a $3.8 billion logistics company (GeekWire, 2023)—went bankrupt despite raising over $1 billion in total funding (Fortune, 2023).

The reason? Cash flow mismanagement.

One small trucking company was left waiting for nearly $160,000 they’d never see (FreightWaves, 2023). A local competitor of ours had the same problem. This wasn’t a “figure it out when we’re bigger” situation. This was a business problem that would kill us today if we didn’t solve it.

The data backs this up: 82% of businesses that fail do so because of cash flow problems, according to a U.S. Bank study (SCORE, 2024), not lack of profitability. And 38% of startups run out of cash, often during growth periods when spending outpaces collections (CB Insights via Capstone CFO, 2025).

The Formula That Saved Us

I developed a simple equation to identify the danger zone:

B + (G × P) = C

Where:

• B = Current Burn

• C = Cash in bank

• G = Growth in GMV

• P = Payment terms in months

When your projected growth multiplied by payment terms equals your cash reserves, you’re in trouble.

We had to act while we still looked strong, not desperate. I researched factoring and credit lines. We approached banks and finance marketplaces with decent cash and solid receivables.

We started with a $100K credit line. Not to fuel growth—to cover pending receivables. That’s the distinction most founders miss.

Today, we run eight credit lines totaling over $1MM and have never missed a payment. We’re not worried about growing too fast anymore.

What I Wish I’d Known in Year One

I would have clearly separated two buckets from day one:

Cash for growth.
Cash for receivables.

There were months we burned through cash while growing, and we decided not to invest in expansion. That decision cost us time.

Time is the most valuable asset for any business.

If you’re celebrating growth but haven’t thought about cash flow infrastructure, run the formula. If the numbers look tight, start building your credit lines today.

This problem isn’t solved in one go. It’s like sales. You need to keep working it.

Growth can kill you faster than stagnation. The question is whether you’ll realize it in time.

Industries Most Vulnerable to Cash Flow Traps

This isn’t just a logistics problem. Certain industries are structurally designed to create cash flow crises during growth.

Construction companies face some of the longest payment terms in business—often 60 to 120 days with “pay-when-paid” or “pay-if-paid” clauses (AABRS, 2023). Subcontractors must pay for materials and labor immediately while waiting months for general contractors to get paid by property owners. One study found that only 1 in 10 construction companies are paid in full on time (Flexbase, 2022).

Manufacturing businesses face a different trap: cash tied up in inventory, raw materials, and production costs before a single sale is made (HighRadius, 2025). Manufacturers often extend net 30-90 day terms to customers while needing to pay suppliers and employees weekly or biweekly. The gap between production costs and customer payment can strangle growth.

Wholesale and distribution companies must purchase significant inventory upfront before selling smaller quantities for profit. If inventory doesn’t move as expected, cash gets locked up on warehouse shelves while bills continue to arrive.

Staffing and recruitment agencies pay employees weekly but often don’t bill clients until after placements are made and confirmed—creating an immediate cash deficit that grows with every new hire.

According to industry experts, hospitality, manufacturing, and construction are the most impacted sectors (Irwin Insolvency, 2024). What they all share: the need to pay expenses before revenue arrives, extended payment terms from large clients, and cash flow gaps that widen exactly when growth accelerates.

If your industry operates on these dynamics, the formula I shared isn’t optional—it’s survival.