undercapitalized
- Refers to a situation where a business does not have sufficient funds to carry out its operations efficiently
- Many startups fail within the first year because they are undercapitalized and cannot sustain their operations.
- The New Venture was undercapitalized; hence, they struggled to expand and meet the demands of their growing customer base.
- To avoid being undercapitalized, it's crucial for businesses to have an accurate projection of their initial costs and revenues.
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