Berkonomics

OCTOBER 5, 2023

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 118

Silicon Valley Burn Rate Angel Investor Down Round 118

Steve Blank

APRIL 26, 2022

Cram downs are back – and I’m keeping a list. At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose.

Cram Down 404

Cram Down Founder Venture Capital Recapitalization 404

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

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

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. Don’t assume that you can “just do a down round” if necessary.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. A high performing, high-growth SAAS company that may have been worth 10 or more times revenue was suddenly worth 4-7 times revenue. By the first quarter of 2016, the late-stage financing market had changed materially.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Both Sides of the Table

MARCH 30, 2016

Investors had grown too used to the idea that any deal you funded would get marked up to a higher valuation in the next round and that’s clearly not always true. Invoca was raising at the tail end of this market phenomenon at this time doing tens of millions in SaaS recurring revenue and growing at a nice clip. FOMO was NOMO.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150