Both Sides of the Table
MAY 28, 2018
Founder: “$8–10 million” VC: “What’s your current burn rate?” VC: “So at a constant rate of burn rate you’d be raising enough for 2.5–3 Every VC wants to fund a deal that seems to have too much demand. Having too little demand leads to bankruptcy. Founder: “$250k / month.” Why are you raising so much?”
Startup Professionals Musings
OCTOBER 16, 2023
External investors will demand a financial forecast, but it’s equally valuable to you, even if bootstrapping. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Yet every business requires revenue and volumes, as certainly as it requires a product to sell.
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Steve Blank
NOVEMBER 2, 2009
In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.)
Startup Professionals Musings
FEBRUARY 5, 2021
External investors will demand a financial forecast, but it’s equally valuable to you, even if bootstrapping. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Yet every business requires revenue and volumes, as certainly as it requires a product to sell.
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. The next most important set of metrics are sales by category; working capital (cash and other current assets, less current liabilities); EBITA; and gross margin.
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. First, venture capital isn’t always appropriate for every startup. Getting Things Right.
Both Sides of the Table
JUNE 17, 2017
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. They don’t want high burn rates but they will never fund slow growth. They raised $5 million in venture capital to fund growth.
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