Both Sides of the Table

SEPTEMBER 29, 2009

High burn-rates fueled by over investment – One of the most damning things that happened to the start-up markets in 97-00 and 05-08 was the overfunding of technology companies. Bu when you start to worry that the world is ending (as it seemed it was in late 2008 / early 2009) you tend to get worried about large burn rates.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

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. Without systems in place to manage distributed spending, finance teams will leave money on the table.”.

Agile 60

Agile Management Forecast Silicon Valley 60

Feld Thoughts

NOVEMBER 18, 2013

Here’s the punchline: if you run your company as if you have closed a VC equity financing round even though you actually closed a convertible debt round, you’ll be in much better shape when it comes time to raise your Series A financing. There is no discussion of burn, runway, and more financing yet.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

Up and Running

APRIL 30, 2020

Financing options: Can I get an emergency payroll loan? What will be the cost of letting somebody go when it includes recruiting and retaining a replacement later when the economy recovers? Define decision points for each scenario as to how you will approach spending, overhead, variable costs, etc.

Forecast 120

Forecast Balance Sheet Burn Rate Software Review 120

Up and Running

APRIL 22, 2020

Maintaining your business through the coronavirus crisis has likely led you to cut costs, revise your sales projections, and potentially seek out a loan to help you stay afloat. Second, if a requested loan is below a certain amount, depending on the size of the lender, the cost to service that loan is too high to make it worth it for them.

SBA 139

SBA Forecast Software Review Business Plan 139

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

Both Sides of the Table

MAY 2, 2015

It’s such a tricky balance between being cost-focused & scrappy versus being impractical with how you spend your time. A great finance leader is on top of your numbers with such precision that you don’t have to worry about it. They can show the projections on what this does to burn rate. And so must you.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Feld Thoughts

SEPTEMBER 16, 2011

They also haven’t launched a product, so there is no corresponding “cost of goods sold” – the direct cost of delivering their product. This results in a gross margin of $0, where gross margin is revenue – cost of goods sold. The default Quickbooks setup uses “Income” to refer to “Revenue”.

Balance Sheet 125

Balance Sheet Fractional CTO Burn Rate Salary 125

YoungUpstarts

JANUARY 9, 2017

by Tina Hay, founder and CEO of Napkin Finance. One of the most important factors in becoming a successful entrepreneur is managing finances. Here’s a checklist that will help you get started: Estimate Start-Up Costs. Estimate your monthly “burn rate.” Learn About Licenses. Set Up Separate Banking Accounts.

Burn Rate 100

Burn Rate B2C Finance Later Stage 100

Startup Professionals Musings

DECEMBER 15, 2014

Count on several months of effort and costly assistance to court investors, with less than a 10% success rate. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. The best partners are ones who share costs and risks.

Bootstrapping 276

Bootstrapping Entrepreneur Startup Burn Rate 276

Both Sides of the Table

FEBRUARY 25, 2019

Here are some observations I have from this exposure: If a company moves from strength-to-strength with predictable outcomes, easy financings, low staff turn-over, limited competitive threats then the composition of the board probably doesn’t matter as much. What are the kinds of difficult tasks that need to be solved by boards?

LP 269

LP Startup Burn Rate Stock Options 269

Both Sides of the Table

FEBRUARY 4, 2016

.” There are a lot of data points that one can observer to get a sense of the venture capital markets – both LP fundings into venture and VC financings of startups. They point to some widely known facts: financings & valuations are up massively over the past 7 years and non-VC money has entered the system.

LP 150

LP Valuation Burn Rate Pre-Money Valuation 150

Up and Running

SEPTEMBER 17, 2014

It is crucial for entrepreneurs to understand their costs of goods and services. This includes a general understanding of the finances. This is the rate at which a company uses up its capital to finance overhead before generating positive cash flow from operations. Gross Margin. Income to Expenses Ratio.

Metrics 146

Metrics Burn Rate Entrepreneur Forecast 146

This is going to be BIG.

MARCH 1, 2010

It’s often some combination of the idea not being big enough to sustain a venture exit or the company just not being appropriate for venture financing. My company was not well executed enough to achieve venture capital financing—and that wasn’t the city’s fault, it was mine. I was there, too. They’re not “dumb Wall Street money”.

New York City 118

New York City New York Startup Burn Rate 118

Both Sides of the Table

FEBRUARY 6, 2017

This past year was also the year that startup boards also got more disciplined about containing burn rates and pushing for companies to be run more pragmatically. With nearly 2/3rd of all VCs citing cost-cutting in 2016 as the norm — this is a clear indication that winter made an appearance.

Venture Capital 150

Venture Capital Saudi Arabia Kuwait Burn Rate 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. Email readers continue here.]

Silicon Valley 85

Silicon Valley Burn Rate Angel Investor Down Round 85

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Finance is mission critical, for instance – it just appears on a recurring basis. (If

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Startup Professionals Musings

JUNE 28, 2013

Count on several months of effort and costly assistance to court investors, with less than a 10% success rate. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. The best partners are ones who share costs and risks.

Startup 264

Startup Burn Rate Bootstrapping Valuation 264

Steve Blank

FEBRUARY 22, 2010

How do we finance the company, etc. 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.

Balance Sheet 304

Balance Sheet Startup Burn Rate Metrics 304

Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. You’ve kept a really low burn rate and paid yourself a very small salary.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Both Sides of the Table

JULY 13, 2013

I got a job at a bank, and I worked in their corporate finance group. We had a finance group for all of the bank branches based in San Diego, and I wrote programs to download stuff from the mainframe so we could do analysis three days faster than they could send us the data. Comp sci in the 80s was terrible.

Cofounder 337

Cofounder Technical Cofounder Startup San Diego 337

Gust

DECEMBER 7, 2014

Count on several months of effort and costly assistance to court investors, with less than a 10% success rate. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. The best partners are ones who share costs and risks.

Bootstrapping 191

Bootstrapping Entrepreneur Startup Burn Rate 191

Startup Professionals Musings

JANUARY 7, 2014

In almost every state, you can incorporate as an LLC with a minimal effort, and a cost in the hundred dollar range. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. The simple answer is to do something, and start simple.

Startup 265

Startup Intellectual Property LLC Burn Rate 265

Haystack

MAY 4, 2019

This is all happening, of course, to a region that doesn’t have a modern public transportation system. As an investor in startups, there is considerable conventional wisdom around the idea of investing only in the Bay Area.

United States 87

United States Portfolio San Francisco New York City 87

Startup Professionals Musings

NOVEMBER 28, 2012

In almost every state, you can incorporate as an LLC with a minimal effort, and a cost in the hundred dollar range. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. The simple answer is to do something, and start simple.

Entrepreneur 274

Entrepreneur Intellectual Property LLC Burn Rate 274

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates. Pragmatic cost cuts are always possible and often productive. Start early.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Valuation 150

Austin Startup

NOVEMBER 11, 2017

We had gathered total more than 250 feedbacks from killers in different domains (marketing, tech, product, finances…).We 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.

Burn Rate 54

Burn Rate Product Cofounder PR 54

Feld Thoughts

FEBRUARY 9, 2016

One of my favorite lines in buried in the middle: “I’ve heard enough companies say “we simply can’t cut costs or it will hurt the long-term potential of the business” to get a wry smile. Pragmatic cost cuts are always possible and often productive.” It’s simply not true. Or you might need to raise it.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Gust

DECEMBER 29, 2013

In almost every state, you can incorporate as an LLC with a minimal effort, and a cost in the hundred dollar range. Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. The simple answer is to do something, and start simple.

Startup 183

Startup Intellectual Property LLC Burn Rate 183

Early Growth Financial Services

MARCH 26, 2013

If you haven’t yet found a viable business model that will allow you to acquire customers at a lower cost than the lifetime value of that customer, you simply are not ready to scale. But you can ready your company by focusing on your finances first. Your burn rate … Continue reading →

Burn Rate 53

Burn Rate Startup Business Model Finance 53

BeyondVC

DECEMBER 10, 2009

Secondly, what is most important for me to understand is the expenses and what milestones will be achieved with this first round of funding and whether or not it would be suitable enough to raise the next round of financing.

Churn Rate 112

Churn Rate Burn Rate Startup Metrics 112

Professor VC

JULY 31, 2008

I actually enjoy the process of pulling together a selection of materials to create a complete course on Entrepreneurial Finance. However, the cost to the students ended up at over $140. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases.

San Jose 28

San Jose Software Review Angel Investor Silicon Valley 28

K9 Ventures

MAY 28, 2015

If you’re selling a product that costs six figures or seven figures, then obviously your thresholds may be very different. At $10K/month, it’s also a meaningful number as now you’re at least covering the cost of 1 full-time person. By carefully managing your burn rate and steadily growing revenue, you can now survive — almost forever.

Revenue 48

Revenue Startup Burn Rate Cofounder 48

Early Growth Financial Services

FEBRUARY 7, 2013

The early stages are the time when you need to establish the structure that will support your company finances, and help define your financial strategy, as you grow. In the beginning, you just need a simple, low-cost accrual-based accounting structure. Set up a simple accounting system.

Early Stage 50

Early Stage Valuation Finance Cost 50

ReadWriteStart

APRIL 30, 2020

Many fail because they fail to keep their burn rate in check and then run out of investors who are willing to fund their operations. They treat their startup’s burn rate like it’s etched in stone. The latter group also tends to spend every waking moment in the pursuit of lining up new financing.

Burn Rate 107

Burn Rate Management Startup Early Stage 107

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. 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.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

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. Instead, start with the quick and easy lean business plan , to help you map out your business and financing activities over the next few months. How to build a profit and loss .

Forecast 157

Forecast Salary Business Plan Balance Sheet 157