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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs. In startup world low GM almost always equals death which is why many Internet retailers have failed or are failing (many operated at 35% gross margins). Valuation.

Burn Rate 383
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Startup Funding – A Comprehensive Guide for Entrepreneurs

ReadWriteStart

Reasons for funding. ? Scale up your operations. One of the most prominent reasons for funding is to scale up your operations, for expansion and achieve economies of scale. Now you may want to scale up your operations or expand your presence. The third reason is to fund your short term operational expenses or working capital.

Startup 150
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On Bubbles … And Why We’ll Be Just Fine

Both Sides of the Table

In addition to FOMO it is partly driven by massive increase in valuations for earlier-stage companies who raised money at bit seed prices but who still have product risk. million pre-money valuation is now raising $1 million at a $12 million valuation the next investor has nowhere to go but up (or sit out the investment).