Startup Professionals Musings

SEPTEMBER 14, 2016

Cash flow is a basic survival metric for every startup. Investors check your burn rate to assess your efficiency, and project your remaining runway before you run out of money and into a brick wall. It doesn’t take a financial genius to recognize that you need to keep your burn rate low. You will make mistakes.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

YoungUpstarts

AUGUST 31, 2019

Keep Cash Burn Low. Every startup, no matter how small or large, should have a clear understanding of its burn rate. This is the critically important metric that tells you how much of your cash you’re spending on a monthly basis.). The first step is to calculate your burn rate. Protect With Insurance.

Burn Rate 126

Burn Rate Startup Lean Early Stage 126

VC Cafe

NOVEMBER 2, 2019

One question that keeps coming up when speaking with early stage entrepreneurs when it comes to funding, is what metrics the company needs to hit to raise seed/series A/B etc: What’s a good conversion rate? Is my churn rate below the category average? 500 Startups created a helpful primer on key B2C metrics.

B2C 141

B2C Technical Review Startup Retention 141

View from Seed

OCTOBER 24, 2019

As a first time founder, having a few million dollars in the bank after a successful seed raise may seem like a huge amount of capital, and it’s easy to lose discipline around your burn rate. Unlike in B2B, you don’t necessarily want to use a second-seed round to get to metrics that every investor will appreciate.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

Up and Running

AUGUST 21, 2014

In this webinar, we take time to discuss the different metrics that startups—and established businesses—should be tracking. In terms of pre-purchase, traffic and content metrics. So I’m going to keep going here, “Pre-purchase, the traffic and content metrics.” Peter, anybody have any questions as I go along?

Metrics 84

Metrics Churn Rate Startup Forecast 84

Steve Blank

MARCH 17, 2020

The questions every startup or small business CEO needs to ask now are: What’s my Burn Rate and Runway? Burn Rate and Runway. To answer the first question, take stock of your current gross burn rate i.e. how much cash are you spending each month. What are the new financial metrics? How do you know?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

YoungUpstarts

JULY 31, 2019

Instead of looking at traditional metrics such as EBITA (earnings before interest taxes and amortization) and MRR (monthly recurring revenue), early investors are compelled by intangibles such as charismatic leadership, a loyal team, exciting IP, an important name on an executive board, news coverage, etc.

Cofounder 114

Cofounder Burn Rate Technical Cofounder Seed Capital 114

David Teten

NOVEMBER 26, 2019

Instead of budget approvals, monitor key metrics and give managers more flexibility. Sean Colrock, Director of Client Partnerships at Wiss & Company , suggests at a minimum you track: cash on hand; fume date; and burn rate. Traditional budgets can be destructive and a huge waste of time.

Agile 60

Agile Management Forecast Silicon Valley 60

Up and Running

SEPTEMBER 17, 2014

That’s why we asked nine members from Young Entrepreneur Council (YEC) what metrics all founders should be aware of — always. No Specific Metric. For me, there is not one metric that is more important than another — you should be up to speed with every aspect. – Matthew Moisan , Moisan Legal, P.C.

Metrics 146

Metrics Burn Rate Entrepreneur Forecast 146

VC Adventure

MARCH 17, 2022

With the markets down significantly, financings (at least at the later stages) slowing down, and inflation and interest rates on the rise, perhaps now is a good time to talk about your burn rate. Your underlying business metrics should.

Balance Sheet 121

Balance Sheet Burn Rate Valuation Metrics 121

Up and Running

OCTOBER 7, 2019

You need to use your time and resources productively by focusing on the right metrics so you can use data to help you implement improvements that matter. The first step is to formulate a KPI strategy by selecting the right metrics to track. The metrics should help you identify areas for improvement.

Founder 71

Founder Retention Metrics Technical Review 71

ReadWriteStart

JULY 9, 2023

Metrics A business should be measurable. Metrics help you identify if you are on the right path and they help to convince prospective investors to give you money. There are more than a dozen startup metrics that a founder can use. Learn how others do it, listen to experts, and figure out your pricing policy.

Intellectual Property 122

Intellectual Property Startup Burn Rate Metrics 122

crowdSPRING Blog

OCTOBER 24, 2014

Benchmarking SaaS Startup Efficiency with Revenue per Employee Metrics | by @ttunguz – crowdspring.co/1sRVdjm. What is the Right Burn Rate at a Startup Company? | How to Ruin Your Company with One Bad Process | by @bhorowitz – crowdspring.co/11FYS9R. by @msuster – crowdspring.co/1qKWc0z. 1wkmIU1.

Social Media 95

Social Media Small Business Design Media 95

Both Sides of the Table

MAY 2, 2015

They can show the projections on what this does to burn rate. The full financial details and metrics were in the deck. So my time was freed up to call board members in advance and walk them through our metrics and understand any concerns. Establishing Metrics & Monitoring Success (or Failures). HR & Legal.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Feld Thoughts

NOVEMBER 18, 2013

Three months in, the burn is now at $70k/month. No updates, screen comps, or metrics have been publicly shared yet. A review of the cash position, burn rate, and execution plan would have revealed there was not enough cash on hand to nail the pivot while leaving 3-6 months of time in market before raising again.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

Up and Running

JUNE 18, 2013

We’ll be using LivePlan to display these metrics. Keep an eye on both your monthly burn rate and any major payables to make sure you’re financially viable in the immediate future. Looking at your burn rate again (monthly ongoing expenses), project forward to see how much runway you have until you run out of cash.

Metrics 79

Metrics Burn Rate .Net Finance 79

Both Sides of the Table

JULY 16, 2013

The minute you try to monetize now they have metrics with which to beat you up and say you’re business has limitations.” The company with no revenue and a $150k burn rate that raised $2.5 In this situation I think we should be increasing burn rate and not immediately focusing on revenue [I do sometimes believe this].

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

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. A seed-stage mobile startup’s housekeeping section might look something like this: Section 3: Core Metrics.

Seed Stage 331

Seed Stage Cap Table Metrics Preferred Stock 331

Steve Blank

FEBRUARY 22, 2010

Do the metrics show that the business model you’re creating will support the company you’re trying to become? Startup Metrics. Startups need different metrics than large companies. Web Metrics. If you have venture investors, work with them to agree what metrics matter. Financials. Contribution Margin.

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Startup Professionals Musings

JULY 4, 2021

Productive processes start with a plan, and end with metrics that measure value delivered. As an entrepreneur, you need a visible business plan and weekly team meetings, so everyone is working on current issues and real goals. Poor or too many business processes. Business processes can be your biggest time saver, or your biggest waste.

Startup 404

Startup Lean Metrics Matching 404

Steve Blank

JUNE 1, 2011

The Wrong Metrics. Traditional startup board meetings spend an insane amount of wasted time using Fortune 100 company metrics like income statements, cash flow, balance sheet, waterfall charts. The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance.

Silicon Valley 290

Silicon Valley Venture Capital Business Model Balance Sheet 290

Startup Professionals Musings

AUGUST 14, 2015

Define metrics to keep on track for the journey. 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.

Elevator Pitch 120

Elevator Pitch Burn Rate Startup Metrics 120

Steve Blank

JUNE 1, 2011

The Wrong Metrics. Traditional startup board meetings spend an insane amount of wasted time using Fortune 100 company metrics like income statements, cash flow, balance sheet, waterfall charts. The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance.

Silicon Valley 258

Silicon Valley Business Model Venture Capital Balance Sheet 258

Both Sides of the Table

AUGUST 25, 2015

private companies grow so quickly that their metrics catch up with their valuations. keep your burn rate under control relative to your balance sheet (ie how much cash you have) and your income statement (how much cash you’re burning). public stocks go up and privates can grow into IPOs; or. start raising early.

Balance Sheet 150

Balance Sheet Valuation Burn Rate Stock 150

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

Startup Lessons Learned

JANUARY 30, 2009

The passionate early adopters who flocked to the product at its launch could not sustain this outsized burn rate. Departments were built and were even metrics-driven. But there was no feedback loop to help the company find the right metrics to focus on. We can capitalize on new customers.

San Francisco 150

San Francisco Lean Agile Continuous Deployment 150

Feld Thoughts

SEPTEMBER 9, 2015

Some will demonstrate strategically justifiable metrics and have fantastic ‘up round’ exits; others may see liquidation preferences kick in which will negatively impact founders and employees; others may fulfill the adage “IPO is the new down round” , which has been the case for more than half of the public companies on our list.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

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

Startup Professionals Musings

AUGUST 7, 2015

Of course, these should never be in a customer pitch, but investors expect an overall strategy with specific budgets, milestones and metrics. This allows them to calculate burn rates, break-even points and forecast the company valuation over time. Specific elements of your marketing and sales plans.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Berkonomics

JULY 1, 2021

First, the VC’s ordered that the company ramp its burn rate (monthly losses in cash) to over $800,000 a month, which I could not fathom. I remained on the board through the life of the corporation, a witness to some surprises along the way that were, at the least, instructional.

Balance Sheet 62

Balance Sheet Cofounder Cash Position Burn Rate 62

YoungUpstarts

JANUARY 11, 2018

When entrepreneurs are selling widely from the start and showing us vanity metrics, it’s clear that they haven’t found PMF and it’s a quick pass for us. When investment capital flows, companies often find themselves putting extreme growth above all other factors, creating high burn rates.

Los Angeles 103

Los Angeles Investment Bankers Cofounder Viral 103

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 Valuation Silicon Valley 40

Mucker Lab

MARCH 8, 2016

Every week, we speak with entrepreneurs who feel like they have solid metrics and growth, but they see other founders effortlessly raise millions of dollars with nothing more than an impressive PowerPoint deck. And we aren’t afraid to roll up our sleeves and get our hands dirty alongside the founders in our portfolio. We understand.

Burn Rate 60

Burn Rate Limited Partner Portfolio Bootstrapping 60

The Equity Kicker

JANUARY 10, 2020

It’s got a big burn rate, it’s too big to pivot, and it goes bust. And what are the metrics for customer love? And as you get bigger, NPS and engagement metrics start to become relevant: how frequently people come back to your site, how long they spend there, how much they talk about you on social media etc.

Partner 68

Partner Early Stage Portfolio Metrics 68

BeyondVC

DECEMBER 10, 2009

Given my experience with SAAS based companies like GoToMyPC (Citrix Online now) and LivePerson (Nasdaq: LPSN), we also spent some time discussing key financial metrics for SAAS businesses that he should pay attention to as he ramped up his business.

Churn Rate 112

Churn Rate Burn Rate Startup Metrics 112

Berkonomics

DECEMBER 18, 2014

First, the VC’s ordered that the company ramp its burn rate (monthly losses in cash) to over $800,000, which I could not fathom. I remained on the board through the life of the corporation, a witness to some surprises along the way that were, at the least, instructional. Protecting the business'

Balance Sheet 71

Balance Sheet Burn Rate Cash Position Forecast 71

ReadWriteStart

JUNE 13, 2011

The Wrong Metrics : Traditional startup board meetings spend an insane amount of wasted time using Fortune 100 company metrics like income statements, cash flow, balance sheet, waterfall charts. The only numbers in those documents that are important in the first year of a startup's life are burn rate and cash balance.

Silicon Valley 117

Silicon Valley Balance Sheet Metrics Early Stage 117