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. What most managers miss is that every month cut from the time it takes to perform such tasks cuts the cost by the value of a month’s worth of fixed overhead or burn.

Silicon Valley 97

Silicon Valley Burn Rate Angel Investor Down Round 97

David Teten

NOVEMBER 26, 2019

Inevitably, things cost more and take longer than expected. Sean Colrock, Director of Client Partnerships at Wiss & Company , suggests at a minimum you track: cash on hand; fume date; and burn rate. I encourage entrepreneurs to correct course with a re-forecast early and often.

Agile 60

Agile Management Forecast Silicon Valley 60

Up and Running

OCTOBER 7, 2019

A data-driven approach can help you make accurate and timely business decisions to meet market demands and improve cost-efficiency. Activation rate: measures how many visitors are engaging with your website or app. ROI: measures the effectiveness of your marketing initiatives by comparing conversion values to costs. Sales KPIs.

Founder 71

Founder Retention Metrics Technical Review 71

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

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? I encouraged them to stay in shorter-term space, higher per-unit costs but no capital outlays. What is your cash balance? Does this suck?

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. 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 85

Silicon Valley Burn Rate Angel Investor Down Round 85

Steve Blank

FEBRUARY 22, 2010

An early indication that you’ve found the right business model is when you believe the cost of getting customers will be less than the revenues the customers will generate. For web startups, this is when the cost of customer acquisition is less than the lifetime value of that customer. Cost Per Acquisition Paid. Financials.

Balance Sheet 300

Balance Sheet Startup Burn Rate Metrics 300

Both Sides of the Table

JUNE 17, 2017

If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. They don’t want high burn rates but they will never fund slow growth. COGS” represents the amount that each sale costs you.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Startup Professionals Musings

AUGUST 14, 2015

Common financial metrics include burn rate, gross margin, revenue growth and net profit. You also need a sales pipeline, customer acquisition costs and marketing costs as a percent of revenue. Define metrics to keep on track for the journey. Continually motivate and reward your team.

Elevator Pitch 120

Elevator Pitch Burn Rate Startup Metrics 120

This is going to be BIG.

MARCH 1, 2010

Even in the Valley, it will cost you over 20k to pay to recruit a developer. 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?

New York City 113

New York City New York Startup Burn Rate 113

Austin Startup

NOVEMBER 11, 2017

For example, I use Uber rather than regular cabs because the driver arrives in less than 5 minutes, I don’t need to have cash or pay by credit card, I know in advance how much it will cost and who will be the driver. How we increased our NPS (net promoted score) by listening our users: Lesson number 3: iterate until you crack it!

Burn Rate 54

Burn Rate Product Cofounder PR 54

Hippoland

DECEMBER 18, 2016

But hopefully you were able to recoup the cost of it prior to starting this company. The cost of living will influence your salary a lot. Your cost to get a startup up and running in the Bay Area will probably be about 2-5x higher than say in Las Vegas. On the flip side, you may be generating some revenues to offset costs.

Las Vegas 48

Las Vegas Salary Burn Rate San Francisco 48

The Equity Kicker

JANUARY 10, 2020

It’s got a big burn rate, it’s too big to pivot, and it goes bust. Plus, step one of the pivot is to get your costs really low in order to preserve the runway to give yourself a chance of succeeding – so the team has to go. They find a niche in the market where they can grow some revenues and then they raise some more money.

Partner 68

Partner Early Stage Portfolio Metrics 68

Startup Professionals Musings

JULY 15, 2013

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater.

Forecast 238

Forecast Business Plan Burn Rate .Net 238

Startup Professionals Musings

JUNE 9, 2012

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater.

Forecast 238

Forecast Burn Rate .Net Business Model 238

Startup Professionals Musings

MARCH 22, 2011

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater.

Forecast 230

Forecast Burn Rate Startup .Net 230

Startup Professionals Musings

MARCH 25, 2010

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater.

Forecast 151

Forecast Startup Burn Rate .Net 151

Startup Lessons Learned

MARCH 27, 2009

While some cost-cutting measures reduce that number, others increase it. In lean times, it’s most important to focus on cutting costs in ways that speed you up, not slow you down. Otherwise, cutting costs just leads to going out of business a little slower.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117

Up and Running

AUGUST 21, 2014

It’s hard to understand how many people will you actually attract, what is it going to cost, what’s your conversion rate, how long will people stay. You’re going to want to really think about how you’re going to drive traffic and what’s most cost effective.

Metrics 84

Metrics Startup Churn Rate Forecast 84

Up and Running

APRIL 2, 2020

Having good projections connects the dots between sales, costs, and expenses to provide you with a holistic picture of your financials. 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.

Forecast 157

Forecast Salary Business Plan Balance Sheet 157

crowdSPRING Blog

DECEMBER 12, 2014

It’s Absurd That Health Care Costs Are So Confusing – crowdspring.co/1yDomRJ. Don’t Get Burned by Your Burn Rate – crowdspring.co/159KKrk. A Refresher on Net Present Value – crowdspring.co/11LJvw6. How to Motivate Employees in Less Than 5 Minutes – crowdspring.co/1CzhuZY. 1vCXLVU.

Social Media 100

Social Media Small Business Design Media 100

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

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

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. It costs you a little more equity, but being able to play the two firms off each other (as well as ask one if the other is being out of line) is invaluable.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76