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

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

Feld Thoughts

NOVEMBER 18, 2013

Convertible debt financings have become an increasingly attractive approach for seed rounds because it delays the valuation discussion, costs less from a legal standpoint, and is an easier financial instrument to “keep raising more small amounts of money” on. Three months in, the burn is now at $70k/month.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

Both Sides of the Table

JULY 16, 2013

It goes like this, “If your next round investor can see how fast you’re scaling then you can raise money based on your user traction and your valuation can hit the sky. The minute you try to monetize now they have metrics with which to beat you up and say you’re business has limitations.” I see this weekly.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

Both Sides of the Table

AUGUST 25, 2015

When they’re bullish venture valuations go up, LPs put more money into VCs, more angels want to get involved, new entrants (hedge funds, mutual funds) feel their missing out and the overall venture market goes us. private valuations go down (slowly because they only adjust at funding intervals or M&A); 0r. So now what?

Balance Sheet 150

Balance Sheet Valuation Burn Rate Stock 150

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 Burn Rate 331

abovethecrowd.com

APRIL 20, 2016

One key to this population growth has been the remarkable ease of the Unicorn fundraising process: Pick a new valuation well above your last one, put together a presentation deck, solicit offers, and watch the hundreds of million of dollars flow into your bank account. By January of 2016, that number had ballooned to 229.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

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. “We

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

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

YoungUpstarts

JANUARY 11, 2018

Nailing it before you scale it can change how much you’re able to raise from investors and the valuation at which you raise. 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.

Los Angeles 133

Los Angeles Investment Bankers Cofounder Viral 133

The Equity Kicker

JANUARY 10, 2020

Maybe they’ll pivot to something great eventually, but in the interim period, the valuation goes sideways – and that’s not a good place for a VC to be. 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? Plus, that’s not even the worst outcome.

Partner 68

Partner Early Stage Portfolio Metrics 68

K9 Ventures

OCTOBER 12, 2015

That increases the competition for deals and drives up the prices (valuation) of these deals. Well the difference is that by doubling the entry valuation you half your return multiple. As valuations increase, VC returns go down. Raise as much capital as you can, but watch your burn rate like a hawk.

Venture Capital 48

Venture Capital Seed Stage LP Valuation 48

Rob Go

FEBRUARY 29, 2016

Mid stage companies need to look at their burn rates and try to do whatever possible to extend runway, focus on proving really great PMF and solid unit economics, and try to survive until better days. Did you raise way too much money at too high of a valuation with downside protection for your most recent investors?

Marketing 28

Marketing Dilution Burn Rate Seed Stage 28

Professor VC

AUGUST 26, 2011

What are the key drivers and metrics? Byron Deeter has a good blog post on SAAS metrics. I like to have one tab with assumptions and one tab with summary financials and key metrics. I also typically, write a text document summarizing the assumptions, validation for the assumptions and key metrics. How do you think?

Silicon Valley 35

Silicon Valley San Jose Hockey Stick Venture Capital 35

BeyondVC

JUNE 11, 2007

It is quite simple – the dollars are relatively cheap compared to an equity financing and extending your runway to hit more critical milestones means a potentially better valuation for your company down the road. And of course if you exit before raising another round, there are more dollars available for the equity holders.

Intellectual Property 60

Intellectual Property Covenant Warrant Equity 60