Jeremy Siegel from Wharton always has great insight. In a recent Q&A, he talked about the fate of Bear Stearns. It's a lesson that holds a lot of weight for entrepreneurs:
The truth is, had they had the liquidity to hold on, the Bear Stearns positions might have turned out to be very profitable. [It's] just like Long-Term Capital Management ten years ago -- had they been able to hold on, those positions became profitable. But they weren't in both of these institutions, and as a result, without liquidity, this is a major risk.
As business owners know (or learn very quickly), it's all about cash. Mediocre companies can make it through tough times if they have enough cash in the bank. Good companies can fail if they don't.