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 does your new business model look like? How do you know?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Startup Professionals Musings

JUNE 27, 2022

You know you should have been tracking the burn rate, or inventory requirements, or late receivables, but have found yourself totally distracted by a flock of emergency daily issues. They let the burn rate go up too fast, and the business burns down before it really starts.

Burn Rate 329

Burn Rate Differentiation Salary Entrepreneur 329

Both Sides of the Table

SEPTEMBER 29, 2009

Three reasons: There is a relative valuation between the price a VC pays and their expectations of what it will exit for in an IPO or trade sale. Also, it’s harder to pay a $30 million pre-money value on an unproved company when you see public companies with $100 million in sales trading for less than $20 million.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Startup Professionals Musings

FEBRUARY 17, 2021

These steps alone can reduce your monthly burn rate by at least $10K. Social media facilitates marketing and sales. As an old rule-of-thumb, startups realized that employees cost double the salaries paid, to cover office costs, health-care benefits, and workers compensation.

Cost 405

Cost Entrepreneur Burn Rate Social Media 405

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. Since this number is budgeted and pre-authorized, managers tend to focus upon other things such as sales, marketing and product development issues.

Silicon Valley 97

Silicon Valley Burn Rate Angel Investor Down Round 97

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.

Agile 60

Agile Management Forecast Silicon Valley 60

Startup Professionals Musings

SEPTEMBER 21, 2019

You know you should have been tracking the burn rate, or inventory requirements, or late receivables, but have found yourself totally distracted by a flock of emergency daily issues. They let the burn rate go up too fast, and the business burns down before it really starts.

Burn Rate 249

Burn Rate Entrepreneur Differentiation Salary 249

Both Sides of the Table

MAY 2, 2015

It freed up Ophir to grow out our sales organization, to work more closely with agencies, to innovate on product and to raise capital. They can show the projections on what this does to burn rate. At board meetings Ophir could focus on strategic questions because he knew that Phil could answer to every number in our board pack.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Berkonomics

APRIL 16, 2020

FINANCIAL: Do you have twelve to eighteen months of cash to cover your “burn rate” now and as you recover? Plan for reductions in fixed overhead, salaries, and other costs now. Are you salespeople making few if any sales because your prospective customers are distracted by their own problems? Everything will recover.

SBA 87

SBA Burn Rate Salary Stock 87

Startup Professionals Musings

DECEMBER 31, 2013

You know you should have been tracking the burn rate, or inventory requirements, or late receivables, but have found yourself totally distracted by a flock of emergency daily issues. They let the burn rate go up too fast, and the business burns down before it really starts.

Burn Rate 275

Burn Rate Entrepreneur Differentiation Salary 275

Up and Running

MARCH 26, 2020

Acknowledging a continued decline in sales and the need to lower expenses is obvious. Sales dropped suddenly. If you already have a budget and a forecast for your business that helps you predict your cash flow, now is the time to dig in and create different scenarios to help you understand how changes in sales will impact your cash.

Management 152

Management Forecast SBA Burn Rate 152

Startup Professionals Musings

OCTOBER 4, 2017

You know you should have been tracking the burn rate, or inventory requirements, or late receivables, but have found yourself totally distracted by a flock of emergency daily issues. They let the burn rate go up too fast, and the business burns down before it really starts.

Burn Rate 139

Burn Rate Differentiation Salary Entrepreneur 139

Startup Professionals Musings

JULY 27, 2014

These steps alone can reduce your monthly burn rate by at least $10K. Social media facilitates marketing and sales. As an old rule-of-thumb, startups realized that employees cost double the salaries paid, to cover office costs, health-care benefits, and workers compensation.

Entrepreneur 260

Entrepreneur Burn Rate Social Media LLC 260

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. Not long after, the company was sold in a “fire sale” amounting to slightly less than the debt on the books. All investors, including the VC firm, lost everything.

Silicon Valley 85

Silicon Valley Burn Rate Angel Investor Down Round 85

Startup Professionals Musings

JUNE 18, 2012

That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. Sales and marketing costs. As a rule of thumb, you should double every employee’s salary in estimating employee costs, so less is more. No office space rental, no secretary, and no accountant are required.

Cost 255

Cost Burn Rate SEM Startup 255

Both Sides of the Table

JUNE 17, 2017

The most obvious way to explain this is with sales people. If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months. They don’t want high burn rates but they will never fund slow growth.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Startup Professionals Musings

MARCH 15, 2015

You know you should have been tracking the burn rate, or inventory requirements, or late receivables, but have found yourself totally distracted by a flock of emergency daily issues. They let the burn rate go up too fast, and the business burns down before it really starts.

Burn Rate 120

Burn Rate Startup Differentiation Salary 120

Startup Professionals Musings

FEBRUARY 15, 2011

That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. Sales and marketing costs. As a rule of thumb, you should double every employee’s salary in estimating employee costs, so less is more. No office space rental, no secretary, and no accountant are required.

Entrepreneur 235

Entrepreneur Burn Rate SEM Social Network 235

Gust

JUNE 10, 2012

That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. Sales and marketing costs. As a rule of thumb, you should double every employee’s salary in estimating employee costs, so less is more. No office space rental, no secretary, and no accountant are required.

Cost 139

Cost Burn Rate SEM Startup 139

Both Sides of the Table

MAY 23, 2010

If no financing happened then this “note&# may not be converted and thus would be senior to the equity of the company in the case of a bankruptcy or asset sale. You’ve kept a really low burn rate and paid yourself a very small salary. It starts as a debt instrument (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Startup Professionals Musings

FEBRUARY 13, 2010

That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. Sales and marketing costs. As a rule of thumb, you should double every employee’s salary in estimating employee costs, so less is more. No office space rental, no secretary, and no accountant are required.

Burn Rate 125

Burn Rate SEM Social Network Angel Investor 125

BeyondVC

JULY 6, 2006

A clear kiss of death that I have seen more often than not is hiring a VP of Sales too early. Hiring a VP of Sales too early can cost you dearly. Hiring a VP of Sales too early can cost you dearly. Here are a few reasons why: VPs of Sales need to make their comp. Before you make this commitment, make sure you are ready.

Hiring 79

Hiring Sales Burn Rate Vertical 79

Transformify

AUGUST 27, 2017

Their investors may push them into that direction too, as the high burn rate is often seen as a prerequisite for high growth. You will have more time to focus on the strategy and sales while looking for the right project/ product manager, etc. The downside? Outsource the development of your MVP. The downside?

Hiring 64

Hiring Software Review Burn Rate Startup 64

VC Cafe

APRIL 27, 2011

VCs should aim to provide comprehensive data to their portcos on industry benchmarks, burn rates, market research, competitive analysis, etc. Benchmark – Use the information from all your investments to give entrepreneurs data about salaries, price for marketing, etc. Have nothing to tweet about?

Venture Capital 90

Venture Capital Differentiation Incubator Angel Investor 90

YoungUpstarts

AUGUST 19, 2016

Then come the marketing, sales, and accounting considerations. While you absolutely need to keep an eye on earnings and burn rate, human capital is ultimately the fuel that makes the machine run. Losing an employee can cost up to 60 percent of his or her annual salary. Developing your product is just the beginning.

Startup 100

Startup Burn Rate Cofounder Salary 100

pandodaily.com

JULY 18, 2012

And the satisfaction of not only paying my own salary– which I’ve done for years on various book projects– but paying the salaries of others. While a 21-year-old with no mortgage, no girlfriend and a low-burn rate may have nothing to lose, a 40-year old with a career, a mortgage and kids has everything to lose.

Entrepreneur 45

Entrepreneur San Francisco Silicon Valley Technical Review 45

Up and Running

APRIL 2, 2020

Your sales have plunged, or worse, your business is now closed during the shutdown. Specifically, if you have an ongoing sales forecast , and expense budgets linked to that forecast, then you have instant visibility for making quick adjustments to sudden change. . What your sales numbers look like in a crisis.

Forecast 157

Forecast Salary Business Plan Balance Sheet 157

Up and Running

AUGUST 21, 2014

You need to get to a point in your funnel where you have enough people coming in that you can get to that conversion rate that will get you the sales that you need to drive your business forward. Sales is obviously the company’s paycheck. As I was mentioning, sales aren’t free.

Metrics 84

Metrics Startup Churn Rate Forecast 84

philipsmith.typepad.com

SEPTEMBER 24, 2011

Recently I was offered the opportunity to help a company and the opening gambit from the CEO was "well, we can only pay equity and in your own blog you say that's OK" Er, yes, but when it turns out that you have a staff of 15, all on salaries, a $3.5m Sales & Marketing. The second example came along just this morning.

Silicon Valley 40

Silicon Valley Equity Technical Review Recapitalization 40

www.paulgraham.com

APRIL 28, 2010

For example, VCs generally write it into the deal thatin any sale, they get their investment back first. Some VCsnow require that in any sale they get 4x their investment backbefore the common stock holders (that is, you) get anything, butthis is an abuse that should be resisted. So after this the option pool is down to 13.7%). [

Technical Review 76

Technical Review Startup Software Review Angel Investor 76