In the fast-moving creative, media and tech (CMT) sectors, growth often happens in cycles – intense development, delivery or pitching periods followed by essential waits for the next funding round. Revenue often lands in milestones, and even strong businesses can face short-term cash flow problems.
Cash flow issues can make you feel on edge, especially when funding delays are totally out of a director’s hands. It naturally leads to those nagging thoughts like, “If the funding doesn’t come through soon, are we even doing the right thing by carrying on trading?”
A restructuring professional can offer help to stabilise the situation, protect the underlying business, and keep investor confidence strong while you wait for funds to land.
Understanding the challenges faced by CMT companies
Creative, media and technology companies frequently operate with challenges such as long project lead times, where payment is typically months behind delivery and high upfront costs in talent, development and production. Income, especially for those in the pre-revenue phase, is often concentrated in milestones or funding events.
All of this makes waiting for funding feel even trickier and more uncomfortable. The perspective of a restructuring professional can give the board comfort to navigate these challenges.
What should directors do during financial pressure?
When you hit a bump in the road, it’s best to go back to basics. Directors must act in good faith, promote the company’s success, exercise independent judgment, and use reasonable care and skill. Sticking to these principles can guide you through the difficult periods.
However, should there be any doubt that the company can pay all its obligations, duties may shift to creditors rather than shareholders.
To fulfil their responsibilities, directors should:
• Monitor the financial position carefully and frequently
• Assess the impact of changing circumstances, especially investor delays
• Keep clear, detailed board minutes of decisions and the rationale behind them
How a restructuring professional can help directors reduce risk
Bringing in a restructuring professional helps by giving clear guidance on your legal duties and supporting you in reducing the risk of wrongful trading or personal liability.
We can help you:
• Hold regular, minuted board meetings: Make sure your board minutes set out why you believe there’s a reasonable prospect of avoiding insolvent liquidation and that any assumptions are challenged constructively.
• Consider new credit carefully: Further borrowing might still make sense in certain situations, for example, finishing a high-value project where income is secure.
• Decide whether trading should continue: There’s no single legal point where trading must stop. In many cases, continuing will be in creditors’ best interests if there is a reasonable belief that funding is on its way
• Stress test your assumptions: Review whether your assumptions would hold up under a worst-case scenario.
Why early advice matters
For founders and directors in creative, media and tech, involving a restructuring professional early is a proactive step, not a sign of failure. It demonstrates responsible leadership, reassures investors, and could open up solutions that simply aren’t available if the situation becomes urgent.
How we can help
At Kreston Reeves, we offer:
• Clear diagnosis of your financial position
• Tailored, sector-aware solutions for your company
• Advice to minimise personal liability
• Guidance to strengthen investor and stakeholder confidence
• Support to avoid common legal and financial pitfalls
• Our initial conversation is free and fully confidential
