Up and Running

OCTOBER 7, 2019

Many startups focus on growth (instead of profits) and often need to track KPIs that may be different from those used by established businesses: Burn rate : indicates the company’s negative cash flow or how quickly it’s spending money. Activation rate: measures how many visitors are engaging with your website or app.

Founder 71

Founder Retention Metrics Technical Review 71

Startup Professionals Musings

DECEMBER 11, 2017

If you want to be assessed as a “premium” acquisition candidate down the road, an aggressive but reasonable target might be doubling revenue each year. Calculate cash-burn rate and investment timing. Project your cash burn rate to keep at least 18 months between venture capital or angel investments.

Burn Rate 144

Burn Rate Forecast Angel Investor Revenue 144

Professor VC

JULY 22, 2009

The burn rates of my portfolio companies is certainly top of mind right now, but thats not what this post is about. Since Im not a fan of any of those genres, I have been looking forward to the release of his latest work, Burn Rate. ProfessorVC. The last blogger in Silicon Valley. Wednesday, July 22, 2009. ▼ July.

Burn Rate 28

Burn Rate San Jose Silicon Valley Angel Investor 28

Hunter Walker

AUGUST 25, 2023

If you interpret that last sentence as “Hunter doesn’t care about burn rate” or “VC thinks founders should be spending whatever they need to grow” you’re incorrect. Their investor updates lead with cash on hand and months until cash out as the top line KPI. I care very much about both.

Burn Rate 78

Burn Rate Acquisition Revenue Founder 78

Steve Blank

FEBRUARY 22, 2010

For web startups, this is when the cost of customer acquisition is less than the lifetime value of that customer. For example, at a minimum, a web based startup needs to understand the Customer Lifecycle, Customer Acquisition Cost, Marketing Cost, Viral Coefficient, Customer Lifetime Value, etc. Customer Acquisition. Financials.

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Feld Thoughts

SEPTEMBER 9, 2015

If private capital is no longer available in the future, these companies will seek a public offering or acquisition. Venture capitalist Marc Andreessen warned in a tweetstorm that startups with high burn rates would “vaporize.” I’m encountering an increasing number of companies with burn rates in the stratosphere.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

Startup Professionals Musings

AUGUST 14, 2015

Common financial metrics include burn rate, gross margin, revenue growth and net profit. You also need a sales pipeline, customer acquisition costs and marketing costs as a percent of revenue. 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

Startup Professionals Musings

AUGUST 7, 2015

This allows them to calculate burn rates, break-even points and forecast the company valuation over time. Startup investments are extremely risky, primarily because the stock has no value until a future liquidity event, such as an acquisition or public offering. Projected revenues and expenses over the strategic period.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

Haystack

SEPTEMBER 1, 2018

They can invest in activities that boost customer acquisition and/or engagement. The sweet spot is a bit of a Goldilocks — VCs do get skittish when they see a wild burn rate, but they also lose interest when they don’t see how the CEO has invested the capital he or she has raised. ”

Burn Rate 76

Burn Rate Term Sheet Acquisition Revenue 76

Both Sides of the Table

JUNE 17, 2017

They don’t want high burn rates but they will never fund slow growth. Amazon is continuing to grow at such a rapid pace that of course it should take some of today’s profits and reinvest them in growth (or acquisitions). Revenue When I look at an income statement I start by focusing on the revenue line.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Startup Professionals Musings

NOVEMBER 7, 2016

Compensation and support carried the corporate burden rate. The burn rate was extremely high, with no one working for equity or deferred compensation. In enterprises, performance objectives are usually tied to internal processes, rather than beating competitors, customer acquisition, and revenue growth.

Technical Review 214

Technical Review Entrepreneur Silicon Valley Burn Rate 214

VC Cafe

NOVEMBER 2, 2019

In SaaS the main benchmarks being measured are revenue growth, sales efficiency (unit economics), churn and burn rate. The main B2C benchmarks have to do with traction: growth in user acquisition, user retention/churn, monetisation, as well as the effectiveness of consumer marketing + virality. Consumer apps and services.

B2C 141

B2C Technical Review Startup Retention 141

Hippoland

FEBRUARY 7, 2016

What customer acquisition channels / what have they tried / not tried / etc] [Is this growing? / May or may not ask this depending on if our hypothetical VC firm leads rounds or not] [What is a team’s burn rate?] [lifetime value] [How much revenue are you making and how has this changed over the last few months? how quickly?]

Burn Rate 48

Burn Rate IP Cofounder Differentiation 48

ReadWriteStart

JANUARY 27, 2011

Jeff also described a compelling in-game offer-based customer acquisition model that is proving quite effective for him. Jeff has managed to keep his burn rate very low thus far, and a slow and steady crafting of the business is working nicely. Brainscape. The answer to the question is neither. Note, I said, validated.

Dilution 114

Dilution Revenue Finance Entrepreneur 114

The Equity Kicker

JULY 16, 2015

Companies with lots of cash sometimes add people more quickly, but that drives the burn rate up, often without a compensating increase in the chance of success. And then we help with talent acquisition too (recruiting is difficult!), A company should, of course, get it’s own team pretty quickly.

eCommerce 60

eCommerce Burn Rate Early Stage Hiring 60

The Next Web

JUNE 15, 2015

According to Airbnb’s Growth Product Manager Rebecca Rosenfelt, the CPA result of these tactics was 5X better than other strategies such as Facebook acquisition costs. Airbnb’s experience shows how local engagement strategies such as these do not have to increase a startup’s burn rate considerably.

Global 60

Global Burn Rate Startup CPA 60

Hippoland

FEBRUARY 21, 2016

You should also include your burn rate and runway. Most entrepreneurs don’t realize that investors can also potentially help you broker an acquisition / coach you through an acquisition if you can’t raise more money or get to profitability. Investor reports do not need to be a chore. 2) How long are you in business?

Burn Rate 48

Burn Rate Acquisition Revenue Metrics 48

Professor VC

SEPTEMBER 26, 2011

In the trailer below, Brad Pitt in describing the new player acquisition philosophy, says "we are card counters at the blackjack table were going to turn the odds at the casino" I look forward to checking out the movie and seeing if RSCM can exploit the odds on early stage investing. Can Entrepreneurship Be Taught? ► October. (1).

Technical Review 38

Technical Review Early Stage San Jose Angel Investor 38

Feld Thoughts

FEBRUARY 9, 2016

.” Many companies have hired ahead of their growth rate because they had the cash to do so. In our portfolio, we generally don’t have this problem because we aren’t big fans of either (a) overfunding companies or (b) escalating burn rates based on headcount.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Up and Running

OCTOBER 1, 2014

Nelson has some tips: Know your burn rate. She notes that if you’re considering acquisition as an exit strategy, creating and maintaining relationships is going to be key. When you’re starting a business to build your own luck, you don’t often have a lot of start up capital. How do you balance it all?

Bootstrapping 107

Bootstrapping Cofounder Portland Burn Rate 107

Eric Friedman

NOVEMBER 8, 2011

Hire 2 people per month ~ $100K/month/per person across 12 months is 24 people at a $2.4MM burn rate. (more if you count options, raises, more payments and “other” but trying to simplify). Hiring Option. You get a stellar group that takes approx. 2 months per person.

Burn Rate 90

Burn Rate Agile Equity Hiring 90

Steve Blank

NOVEMBER 2, 2009

The key contributors to an out-of-control burn rate is 1) hiring a sales force too early, 2) turning on the demand creation activities too early, 3) developing something other than the minimum feature set for first customer ship. What’s the customer acquisition cost? Who influences a sale? Who recommends a sale?

Lean 244

Lean Silicon Valley Startup RSS 244

Professor VC

FEBRUARY 26, 2008

Besides the natural fit with eBay, he wanted the buyer to feel good following the acquisition and certainly the investors in StubHub were happy. All of this only helps for the next venture. Heres another bonus lesson. Be passionate about whatever it is you are doing. Can Entrepreneurship Be Taught? ► October. (1). ► September. (1).

Technical Review 28

Technical Review San Jose Angel Investor Silicon Valley 28

Startup Lessons Learned

MAY 15, 2020

The customer acquisition costs are going down. If you can reduce your cost per customer acquisition, if you can connect in a way that expands your email database, adds more customers and allows you to connect in new ways, that's setting a platform for the future for you. They said, "What shall we do? Shall we amp up advertising?"

Dallas 68

Dallas Employee Government Social Media 68

Ben's Blog

SEPTEMBER 2, 2011

What’s our burn rate? Although we eventually opted for an acquisition by Cisco versus an IPO, I came to believe that our type of total transparency was a competitive weapon that applied primarily to private companies. What are the biggest problems we are facing? Did we decide to build, buy or acquire a critical component?

IPO 78

IPO Burn Rate Leadership Employee 78

techcrunch.com

FEBRUARY 26, 2013

He knows how to advise entrepreneurs on hiring/firing, running teams, managing funding, when/how to control burn rate, and making other tough management decisions in the real environment of startups. I was almost isolated in my view.

Burn Rate 87

Burn Rate Hiring Engineer Entrepreneur 87

Professor VC

FEBRUARY 18, 2011

The LinkedIn acquisition of CardMunch a few weeks ago caught my attention. Techcrunch called it one of the " most like-minded and forward-thinking acquisitions I’ve ever seen " I met with the founders of CardMunch several months ago when they were out raising their Series Seed round. The last blogger in Silicon Valley.

Acquisition 31

Acquisition San Jose Angel Investor IPO 31

Professor VC

JUNE 20, 2011

A talent acquisition or bootstrapping are still options, but need to include buy-in from the investors. In iControl’s case, there were exit options at different stages, but now with more than $100M invested, the only options where investors will be happy will be an IPO or $1B+ acquisition, which greatly limits strategic options.

San Jose 28

San Jose Angel Investor Term Sheet Venture Capital 28

thestartuplawyer.com

FEBRUARY 24, 2010

Contact The Startup Lawyer: Home Page About Contact FAQs Glossary Ryan Roberts Law: Home Page Social Networks: Facebook Twitter LinkedIn Flickr Delicious Digg Last.FM He obviously never launched a startup and got shafted by a co-founder.

Cofounder 40

Cofounder Founder Preferred Stock Startup 40

Professor VC

SEPTEMBER 24, 2009

Blink starts with the anecdote of the Getty Museums $10 million acquisition of a rare Greek statue dating from the 6th century BC. Luckily, Rons gut told him to get as much money as he could in to Google, which saved the fund. I just finished reading Malcolm Gladwells Blink. They spent 14 months researching the authenticity. ► July. (1).

San Jose 33

San Jose Angel Investor Venture Capital Mezzanine 33

Up and Running

AUGUST 21, 2014

All that money that you spend in pay-per-click is going to go into your customer acquisition cost. Obviously, at the end of the day, the eCommerce conversion rate, how many people end up purchasing, it’s what you’re going to end up using to actually track your customer acquisition costs.

Metrics 84

Metrics Startup Churn Rate Forecast 84

Up and Running

MAY 22, 2018

Nerdy term: Acquisition cost for new customers (sometimes referred to as CAC, or “customer acquisition cost”). Nerdy term: Burn rate. This means before they bought your product, how much direct or indirect cost did you incur? This includes the commissions, advertising costs, trial periods, and so on.

Exit Strategy 90

Exit Strategy Angel Investor Search Elevator Pitch 90

www.paulgraham.com

APRIL 28, 2010

Its thesame with acquisitions. When you have a high "burn rate," youre alwaysunder time pressure, which means (a) you dont have time for yourideas to evolve, and (b) youre often forced to take deals you dontlike. No one wants to buy you till someone elsewants to buy you, and then everyone wants to buy you.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

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. As with many Silicon Valley failures, a flawless PR launch turned into a flawed customer acquisition strategy. We can capitalize on new customers.

San Francisco 150

San Francisco Lean Agile Continuous Deployment 150