Both Sides of the Table

NOVEMBER 3, 2009

’ Our Net Income will be $40 million.&#. 66% Net Operating Margins? Too aggressive about the rate of customer adoption? You might then slow down your burn rate or raise more money. Do you need to rethink referral deals or do you need to improve your conversation rates to hit the same revenue numbers.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Berkonomics

AUGUST 10, 2017

Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies. Although young companies rarely measure profitability this repeatedly, more mature companies usually can bring from five to ten percent of revenues to the bottom line in the form of net profit.

Silicon Valley 97

Silicon Valley Burn Rate Angel Investor Down Round 97

ReadWriteStart

APRIL 26, 2011

MicroVentures does the due diligence for investors, running a variety of checks on financials, forecasts, use of funds, burn rate and so on. We have over 500 investors that have over $25 million in liquid net worth, and our process is automated online so we minimize all of the paperwork and handle most of the investor calls.".

Software Review 122

Software Review Accredited Investor Due Diligence Burn Rate 122

David Teten

NOVEMBER 26, 2019

Sean Colrock, Director of Client Partnerships at Wiss & Company , suggests at a minimum you track: cash on hand; fume date; and burn rate. Entrepreneur Jeff Magnusson provides a sample agile budgeting workbook. Ben Horowitz writes that you can ruin your company with a bad budgeting process and recommends a similar approach. .

Agile 60

Agile Management Forecast Silicon Valley 60

Up and Running

OCTOBER 7, 2019

Many startups focus on growth (instead of profits) and often need to track KPIs that may be different from those used by established businesses: Burn rate : indicates the company’s negative cash flow or how quickly it’s spending money. Activation rate: measures how many visitors are engaging with your website or app.

Founder 71

Founder Retention Metrics Technical Review 71

David Cohen

MARCH 1, 2017

As an investor, I’m often asked what sort of burn rate is appropriate for a growing company. For SaaS companies in this situation, my rule of thumb for burn guidance is to have a one year ratio of net burn to net new MRR. Your $30K of net new MRR pays back this months burn over the next year.

.Net 91

.Net Burn Rate Cloud Metrics 91

Feld Thoughts

SEPTEMBER 9, 2015

Venture capitalist Marc Andreessen warned in a tweetstorm that startups with high burn rates would “vaporize.” I’m encountering an increasing number of companies with burn rates in the stratosphere. I get uncomfortable when the net burn rate for a company goes above $500k / month.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

Both Sides of the Table

OCTOBER 14, 2015

” It goes like this: What is your net burn rate? What is your revenue growth rate and what does this imply about your number of months of capital remaining? We have an entire generation of startup founders who don’t have muscle memory from getting their burn rates back into shape from 2008/09 or 2001-2005.

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

Berkonomics

MARCH 30, 2010

Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies. There is a relationship between time and money that is more complex than most managers think.

Silicon Valley 85

Silicon Valley Burn Rate Angel Investor Down Round 85

Feld Thoughts

AUGUST 14, 2014

I’m totally comfortable with you running hot at an $xxx net burn rate for the balance of the year. I know I wasn’t helpful today. So you are clear about where I’m at. - I’m psyched about the progress you are making. - You’ve got plenty of money.

Burn Rate 160

Burn Rate Audio .Net Video 160

Up and Running

JUNE 18, 2013

Keep an eye on both your monthly burn rate and any major payables to make sure you’re financially viable in the immediate future. If you are running a monthly net loss, you need to closely monitor how much of your expenses aren’t being funded from revenues. Profitable companies run out of cash too. How much runway do we have?

Metrics 79

Metrics Burn Rate .Net Finance 79

Startup Professionals Musings

AUGUST 14, 2015

Common financial metrics include burn rate, gross margin, revenue growth and net profit. This means delegating tasks and not micro-managing, as well as more time spent working on the business, rather than in the business. Define metrics to keep on track for the journey.

Elevator Pitch 120

Elevator Pitch Burn Rate Startup Metrics 120

Steve Blank

FEBRUARY 22, 2010

Cost Per Acquisition Net. Regardless of your type of business model you should be tracking cash burn rate, months of cash left, time to cash flow breakeven. Paying Customers (How many customers made $ purchases that month). Paying/(Activations + Retained 30+). Financials. Contribution Margin. Months of cash left. Web Metrics.

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Austin Startup

NOVEMBER 11, 2017

How we doubled the scrolling rate of the Babbler Newsfeed: by changing the search system, show more stories before scrolling and refreshing the UI. How we increased our NPS (net promoted score) by listening our users: Lesson number 3: iterate until you crack it! This is usually represented in terms of months.

Burn Rate 54

Burn Rate Product Cofounder PR 54

This is going to be BIG.

MARCH 1, 2010

If you want to build your startup in the middle of nowhere and optimize purely for low burn rate, then sure, I’m sure you could work more cheaply elsewhere. That being said, is low burn rate really what you should be optimizing for? > Office rents?

New York City 113

New York City New York Startup Burn Rate 113

Hippoland

DECEMBER 18, 2016

If you are generating a fair bit of revenue ($1m net runrate), then you might be paid a low 6-figure salary. Raised $1.5M+ : Lastly, if you’ve raised a large seed round, you’re probably a post-seed company indicating that you have significant revenues ($1m net runrate) coming in the door.

Las Vegas 48

Las Vegas Salary Burn Rate San Francisco 48

ithacaVC

OCTOBER 29, 2011

As one of my mentors has said over and over “it’s all about burn rate and fume date!!!” ” Carefully tracking expenses gives you both the burn rate (how much net cash you spend each month) and fume date (the date you will likely run out of cash).

Revenue 49

Revenue Finance Burn Rate Forecast 49

Both Sides of the Table

JUNE 17, 2017

They don’t want high burn rates but they will never fund slow growth. Venture capital isn’t right for many business but if you do want to raise from a VC at some point you need to understand that often investors care more about growth than profits. Revenue When I look at an income statement I start by focusing on the revenue line.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

The Equity Kicker

JANUARY 10, 2020

It’s got a big burn rate, it’s too big to pivot, and it goes bust. The industry classic is NPS – the Net Promoter Score; and we encourage all our companies to track that as soon as they can. They find a niche in the market where they can grow some revenues and then they raise some more money. And everyone’s lost a lot of money.

Partner 68

Partner Early Stage Portfolio Metrics 68

Startup Professionals Musings

JULY 15, 2013

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Then there are computer costs, trade shows, inventory, and a thousand other things. Check industry average statistics to make sure you are in the right range. Cash flow is king.

Forecast 238

Forecast Business Plan Burn Rate .Net 238

Startup Professionals Musings

JUNE 9, 2012

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Then there are computer costs, trade shows, inventory, and a thousand other things. Check industry average statistics to make sure you are in the right range. Cash flow is king.

Forecast 238

Forecast Burn Rate .Net Business Model 238

Rob Go

FEBRUARY 29, 2016

Mid stage companies need to look at their burn rates and try to do whatever possible to extend runway, focus on proving really great PMF and solid unit economics, and try to survive until better days. Funding may be challenging, but it by no means has completely dried up.

Marketing 28

Marketing Dilution Burn Rate Seed Stage 28

Startup Professionals Musings

MARCH 22, 2011

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Then there are computer costs, trade shows, inventory, and a thousand other things. Check industry average statistics to make sure you are in the right range. Cash flow is king.

Forecast 230

Forecast Burn Rate Startup .Net 230

Startup Professionals Musings

MARCH 25, 2010

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Then there are computer costs, trade shows, inventory, and a thousand other things. Check industry average statistics to make sure you are in the right range. Cash flow is king.

Forecast 151

Forecast Startup Burn Rate .Net 151

Startup Lessons Learned

MARCH 27, 2009

The full formula works like this: runway = cash on hand / burn rate # iterations = runway / speed of each iteration Very few successful companies ended up in the same exact business that the founders thought theyd be in (see Founders at Work for dozens of examples). Were talking PayPal -sized variations.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117

Up and Running

APRIL 2, 2020

Also, for your crisis plan, be sure that you know your burn rate and runway , which is how quickly you are using up your cash reserves and how long you have before you run out of cash. How to build a profit and loss . How to forecast cash flow . Building your balance sheet. The difference between cash and profits. .

Forecast 157

Forecast Salary Business Plan Balance Sheet 157

crowdSPRING Blog

DECEMBER 12, 2014

Don’t Get Burned by Your Burn Rate – crowdspring.co/159KKrk. A Refresher on Net Present Value – crowdspring.co/11LJvw6. When You Give Your Team a Goal, Make It a Range – crowdspring.co/1yINX9Z. 7 Simple Ways to Appreciate your Team (and Boost Performance) – crowdspring.co/1veUNVr. 1vCXLVU.

Social Media 100

Social Media Small Business Design Media 100

abovethecrowd.com

FEBRUARY 24, 2015

As another example, consider that most public marketplace companies, such as ebay or GrubHub, report revenues on a “net” basis rather than gross (approximately 80-90% of revenues go to supplier partners, so this is the proper conservative representation). You should not pay a net revenue multiple for a gross revenue disclosure.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

abovethecrowd.com

APRIL 20, 2016

The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance which many Unicorn CEOs and investors are ill-prepared to navigate. Layoffs have also become more prevalent.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Professor VC

SEPTEMBER 2, 2010

We do have certain angels aggressively marketing themselves (Good to see my former student, Dave McClure, making a name for himself as part of the PayPal Mafia and " Super Angel " crowd), many others have no interest in publicizing their net worth or investing activities. Can Entrepreneurship Be Taught? ► October. (1). ► July. (1).

Angel Investor 28

Angel Investor Angel Groups San Jose Venture Capital 28

Start Up Blog

JUNE 18, 2014

Net result is that startup culture hot. Burn Rate – used to be a sign that this new business venture wasn’t going so well. Or is it just a rebranding of small business as we knew it with some terrific superlatives and rockstar billionaire game winners to give us that Bruce Springsteen stadium rock ethic?

Burn Rate 81

Burn Rate Startup Lean .Net 81

Up and Running

AUGUST 21, 2014

Net profit, obviously at the end of the day, the true bottom line. I know I’m talking really quickly and throwing out a lot of terms. When you see a negative cash balance, that means you will be bouncing checks if you don’t get investment or loan. Does your company make more than it spends, do your profits fluctuate?

Metrics 84

Metrics Startup Churn Rate Forecast 84

www.paulgraham.com

APRIL 28, 2010

Such deals may be a net winfor founders, because you get multiple VCs interested in yoursuccess, and you can ask each for advice about the other. When you have a high "burn rate," youre alwaysunder time pressure, which means (a) you dont have time for yourideas to evolve, and (b) youre often forced to take deals you dontlike.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Hunter Walker

NOVEMBER 25, 2022

It’s also a reminder why keeping your personal burn rate low is such a career expanding move. If your personal burn rate floor is high because you’ve been living off a Google salary and can’t imagine how you’d survive earning less, you won’t find most seed stage startup offers to be competitive in the near-term.

Salary 56

Salary Burn Rate Dilution Equity 56