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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

by Michael Woolf that is worth any startup founder reading to get a sense of perspective on the reality warp that is startup world during a frothy market such as 1997-1999, 2005-2007 or 2012-2014. So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000.

Burn Rate 383
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The “Grow or Die” Lie: Why Everything You Think You Know About Business Growth Is Wrong

YoungUpstarts

When not approached carefully, growth can destroy value as it outstrips a company’s managerial capacity, processes, quality, and financial controls, or substantially dilutes customer value propositions. Growth can dilute a business’s culture and customer value proposition and put the business in a different competitive space.

Dilution 209
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Angel Investing 4 – Why You Need Deep Pockets to Win Big

Both Sides of the Table

As I’ve highlighted I believe we’re in a unique period similar to 2005-08 where the biggest tech firms of Silicon Valley (and some media companies) are scooping up small software companies as “talent acquisitions&# versus accretive revenue / profit generators. avoid being diluted). But it is.

Cap Table 283
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The Entrepreneur’s Essentials #8: Bootstrap or VC?

Austin Startup

Although bootstrapping is still an approach in Austin, a lot has changed since I wrote my original challenge to the Bootstrap Austin group back in 2005. Groups list on March 15, 2005. I failed to do that with Coremetrics and I paid dearly for it with dilution. Below is a post I wrote on their Yahoo! 2008 Harvard Business Review.

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Ted Rheingold Founded Dogster in 2004: Five Questions About Building a Startup, Selling a Startup and Whether SF Is Still a Good Place

Hunter Walker

I wish I could claim I deftly foresaw this, but I was just seeking recurring revenue to to cover OneMatchFire’s office expenses. By the end of 2004 I had brought on two co-founders: John Vars – who is now the Chief Product Office at TaskRabbit, and Steven Reading took over Sales and Revenue.

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How to Build a User Research Culture

ConversionXL

At Samsung, user research led the company to redesign its televisions in 2005, doubling their market share in just two years. It’s likely to be related to improving revenues, reducing costs, increasing the number of new customers, increasing the sales from existing customers, or increasing shareholder value. What about user personas ?

Design 111
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How Open Should a Startup CEO be with Staff?

Both Sides of the Table

We funded one in 2005 and lost a lot of money. Sure, our revenue is growing, but is that enough to raise an internal round? Dilution / valuation. I hate when companies publish too much information about the total stock option allocations, the company valuations, the dilution faced in every round, etc. Sorry, brah.”

Startup 417