Never Get Over Your Skis

Clark Golestani on Black Monday, cash discipline, venture vs. private equity and why saying no builds trust

There are moments in history you never forget.

Clark Golestani can tell you exactly where he was on Black Monday in 1987. Sitting at MIT. Lunch on the table. A friend with a Quotron machine watching the ticker collapse in real time. Sprouts flying across the table as portfolios evaporated. Phone calls to Fidelity that couldn’t get through. Students who had invested their tuition loans not returning the next semester.

It was chaos.

But Clark wasn’t just watching markets fall. He was building a startup at the time - raising capital into a market that had suddenly gone silent.

Venture funding didn’t “slow.” It disappeared.

And that experience shaped a philosophy he has carried from Oracle to Merck to private equity to venture capital - a philosophy every founder should internalize:

Never get over your skis. Manage cash tightly. Even when it’s sunny, prepare for rain.

This edition of The PMF Playbook is about cycles, discipline, bubbles, and the fundamental difference between building enterprise value and building EBITDA.

Because if you misunderstand those forces, the market will teach you the hard way.

What Clark learned in 1987 wasn’t just about volatility. It was about fragility.

Capital markets feel permanent when they’re working. Funding feels abundant when it’s flowing. Valuations feel justified when they’re rising.

Until they’re not.

As he was raising his next round, venture firms that had been active simply stopped investing. Meetings continued. Interest was polite. But checks weren’t being written. For one to two years, capital was effectively frozen.

That moment crystallized something most founders only learn once: access to capital is cyclical. It is not a right. It is not permanent. And it can vanish without warning.

The founders who survive aren’t the most optimistic. They’re the most prepared.

Clark has spent time inside hypergrowth companies and inside conservative ones. The contrast is instructive.

At Merck, under CFO Judy Lewent, the company was famously conservative. Cash buffers were built quietly. Critics questioned why so much capital sat idle.

Then Vioxx happened.

A multibillion-dollar drug was voluntarily pulled from the market. Any other company might have collapsed under the financial shock. Merck survived because it had prepared for a rainy day long before the clouds formed.

Clark sees founders make the opposite mistake constantly. They raise late. They burn aggressively. They treat runway like a shot clock in basketball, pushing right to zero before negotiating the next round.

But time is leverage.

If you’re negotiating with six weeks of runway left, the investor has the power. If you’re negotiating with 18 months in the bank, you do.

And leverage determines terms.

Clark’s rule is simple. Never let runway fall below six months. Ideally, never below twelve. And if you can engineer 24–36 months at earlier stages, even better.

For profitable businesses, the principle remains the same. Keep twelve months of cash on hand. Negotiate credit facilities when times are strong, not when you’re desperate. Banks lend when you don’t need it. They disappear when you do.

Cash isn’t fear. Cash is optionality.

Clark also carries another scar from 1987: the importance of spotting bubbles.

He believes AI today sits squarely in a hype cycle. That doesn’t mean it isn’t transformative. It likely will be more transformative than IT, perhaps rivaling the steam engine in productivity impact.

But hype and inevitability can coexist.

The mistake isn’t believing in the transformation. The mistake is confusing the current valuation environment with the long-term value creation curve.

Clark distinguishes between evolution and bubble this way: humans overestimate what will happen in one year and underestimate what will happen in ten.

AI will change everything. But we are still in the “brick phone” phase - the large suitcase-era mobile phone, not the iPhone.

The risk today isn’t that AI won’t matter. It’s that people will overpay for proximity to it, underprepare for volatility, and underestimate the time required for infrastructure - compute, energy, quantum - to truly support the most extreme visions.

In other words: believe in the future. Price the present carefully.

Clark operates in both worlds - private equity and venture - and he describes the difference in almost theological terms.

In private equity LP meetings, one word dominates every conversation: EBITDA.

Profitability. Covenants. Leverage ratios. Debt coverage. Margin expansion. Everything flows through the lens of sustainable cash generation and risk management.

The objective is disciplined value creation with managed risk. A 3–5x return is excellent.

In venture LP meetings, the vocabulary shifts entirely.

Enterprise value. Market expansion. Category dominance. Speed. Optionality. Risk-taking. A 3x return is insufficient. The expectation is asymmetric upside - Snowflake, Google, generational outcomes.

Private equity optimizes for durability and EBITDA growth.

Venture optimizes for enterprise value and outsized market expansion.

Neither is superior. They serve different mandates and different LP expectations. Wealth preservation and wealth multiplication require different strategies.

But founders must understand which game they are playing.

If you are venture-backed, you are being funded for scale and enterprise value expansion, not modest profitability.

If you are private equity-backed, profitability discipline is not optional. It is foundational.

Confuse the two, and you disappoint your investors.

One of Clark’s most counterintuitive lessons came from Oracle.

When he joined, Oracle was growing at over 100% per year. Explosive growth. Market enthusiasm. Hyper-expansion.

And yet, that speed nearly killed the company.

Hypergrowth introduces its own risks. Quality slips. Systems lag. Leadership gaps widen. The very momentum that looks like success can become destabilizing.

Clark tells a story about Snowflake’s early days under Bob Muglia. As CIO at Merck, Clark repeatedly tried to become an early Snowflake customer.

Bob said no.

For nearly three years.

The product wasn’t ready for heavily regulated industries like biopharma. Rather than chase revenue prematurely, Snowflake sequenced its market entry carefully.

Paradoxically, every “no” built more credibility.

When Snowflake finally entered biopharma, it did so with trust.

The lesson is subtle but powerful: saying no can increase long-term enterprise value.

Chasing every dollar creates internal chaos and weakens your mission. Discipline creates trust.

Clark’s venture fund, K2 Access, was built around a specific hypothesis: access to markets and decision-makers accelerates product-market fit.

Startups don’t just need capital. They need high-quality customer conversations, feedback loops, and credibility.

If you can compress the time to product-market fit and connect founders to buyers early, you bend the curve of success.

Early data from K2 Access is striking. A significant percentage of companies passing through its ecosystem have reached unicorn status. That’s not accidental. It’s the byproduct of curated exposure and disciplined selection.

The broader insight is this: venture value-add is not just capital. It’s network density, signal quality, and acceleration of learning.

When asked for a book recommendation, Clark echoes what many elite founders and investors have said before: The Hard Thing About Hard Things.

Because eventually, every founder faces hard decisions.

Replacing executives. Letting early employees go. Pivoting strategy. Raising under pressure. Cutting costs. Walking away from opportunities.

Larry Ellison, Clark notes, repeatedly restructured leadership at Oracle at critical inflection points. Growth requires evolution. Evolution requires uncomfortable decisions.

If you can’t make them, you must find someone who can.

From Black Monday to Oracle to Merck to private equity to venture, Clark’s worldview has a consistent thread:

Cycles are inevitable.
Bubbles form.
Growth can destabilize.
Capital disappears.
Leverage shifts quickly.

The founders who endure are not the most optimistic. They are the most disciplined.

They don’t get over their skis.
They manage cash tightly.
Even when it’s sunny, they prepare for rain.

Because when the storm comes - and it always does - preparation isn’t defensive.

It’s survival.

Until next time,

Firas Sozan
Your Cloud, Data & AI Search & Venture Partner

Find me on Linkedin: https://www.linkedin.com/in/firassozan/
Personal website: https://firassozan.com/
Company website: https://www.harrisonclarke.com/
Venture capital fund: https://harrisonclarkeventures.com/
‘Inside the Silicon Mind’ podcast: https://insidethesiliconmind.com/