Steve Blank

FEBRUARY 26, 2013

90 days later, I found out our games are terrible, no one is buying them, our best engineers started leaving, and with 120 people and a huge burn rate, we’re running out of money and about to crash. This can’t be happening to me. Stage 2: Deny any of it was your fault.

Redemption 333

Redemption Cofounder Silicon Valley Burn Rate 333

Both Sides of the Table

APRIL 23, 2017

You have cash in the bank, a monthly burn rate and a “cash out” date that few in the company truly comprehend. When you run a startup you’re always on borrowed time. I’ve never met a founder who wasn’t acutely aware of his or her ticking time bomb and the sense that failure and humiliation is a real possibility.

Burn Rate 238

Burn Rate Term Sheet CTO Hire Fractional CTO 238

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. Required pivots and budged changes are painfully slow and over-analyzed.

Technical Review 214

Technical Review Entrepreneur Silicon Valley Burn Rate 214

Steve Blank

FEBRUARY 25, 2010

The next step in the Customer Development process is Customer Validation – making sure that there really is a repeatable and scalable revenue and business model before you turn up your cash burn rate. My version of Customer Validation for an enterprise software company looked liked this: Customer Validation for Web Startups.

Customer Development 273

Customer Development Web Developer Customer 273

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. And most startup code and features end up on the floor as customers never really wanted them.

Lean 262

Lean Silicon Valley Startup RSS 262

Startup Professionals Musings

FEBRUARY 18, 2023

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate?

Sweat Equity 207

Sweat Equity Burn Rate Technical Review Intellectual Property 207

Both Sides of the Table

JUNE 19, 2017

One of the hardest decisions entrepreneurs make when they start a company and raise outside capital is figuring out what an acceptable “burn rate” is. The main reason to know your burn is to arrive at a quick calculation of how many months cash you have before you run out of cash.

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

Startup Professionals Musings

SEPTEMBER 12, 2021

They can iterate and evolve their business idea with a low burn rate and minimal dependencies. Most of these scenarios involve attracting outside investors, strategic partners, or key team members: You are the team and you don’t need outside funding. You’ve built a successful startup before, and plan to use the same investors.

Business Plan 316

Business Plan Technical Review Angel Investor Due Diligence 316

Startup Professionals Musings

JUNE 9, 2012

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Then there are computer costs, trade shows, inventory, and a thousand other things. Check industry average statistics to make sure you are in the right range. Cash flow is king.

Forecast 238

Forecast Burn Rate .Net Business Model 238

Startup Professionals Musings

JULY 15, 2013

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Then there are computer costs, trade shows, inventory, and a thousand other things. Check industry average statistics to make sure you are in the right range. Cash flow is king.

Forecast 238

Forecast Business Plan Burn Rate .Net 238

Startup Professionals Musings

NOVEMBER 7, 2014

They can iterate and evolve their business idea with a low burn rate and minimal dependencies. Most of these scenarios involve attracting outside investors, strategic partners, or key team members: You are the team and you don’t need outside funding. You’ve built a successful startup before, and plan to use the same investors.

Business Plan 274

Business Plan Technical Review Angel Investor Due Diligence 274

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates.

Burn Rate 150

Burn Rate Cap Table Startup Dilution 150

Startup Professionals Musings

JULY 9, 2014

What is the startup cash burn rate per month? Build yourself a list of specific questions, like the following, and get the answers, both informally and formally as you interview and make the rounds: Do you feel strongly about the product or service? How much money has been invested so far? Are more investment rounds required (runway)?

Technical Review 250

Technical Review Stock Options Silicon Valley Due Diligence 250

Startup Professionals Musings

MARCH 22, 2011

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Then there are computer costs, trade shows, inventory, and a thousand other things. Check industry average statistics to make sure you are in the right range. Cash flow is king.

Forecast 230

Forecast Burn Rate Startup .Net 230

Feld Thoughts

NOVEMBER 18, 2013

A review of the cash position, burn rate, and execution plan would have revealed there was not enough cash on hand to nail the pivot while leaving 3-6 months of time in market before raising again. A discussion around overall business viability, time to market, and capital impact would have ensued.

Burn Rate 192

Burn Rate Equity Software Review Early Stage 192

Steve Blank

FEBRUARY 26, 2013

90 days later, I found out our games are terrible, no one is buying them, our best engineers started leaving, and with 120 people and a huge burn rate, we’re running out of money and about to crash. This can’t be happening to me. Stage 2: Deny any of it was your fault.

Redemption 225

Redemption Cofounder Silicon Valley Burn Rate 225

Both Sides of the Table

OCTOBER 12, 2010

If you can’t figure all of this out then adding a non-founder sales person isn’t going to solve your problems – it’s just going to add to your burn rate. If you don’t have a “base camp&# understanding of these issues you’re not ready to hire a sales person.

Hiring 346

Hiring Sales Startup Early Stage 346

Feld Thoughts

SEPTEMBER 16, 2011

This resulted in an annualized burn rate more in the neighborhood of $55,200 ($4,600 * 12). However, Jane realized that $3430 associated with the new office space security deposit and rennovations is essentially a one-time expense.

Balance Sheet 155

Balance Sheet Fractional CTO Burn Rate Salary 155

Feld Thoughts

OCTOBER 5, 2022

Andy Dunn , who I only know indirectly, wrote an important book titled Burn Rate: Launching a Startup and Losing My Mind. While there might be other entrepreneur autobiographies like Burn Rate , I can’t think of any. The post Book: Burn Rate: Launching a Startup and Losing My Mind appeared first on Brad Feld.

Burn Rate 192

Burn Rate Startup New York Restful 192

Both Sides of the Table

DECEMBER 16, 2009

I just knew that our sales sucked wind and we were burning through tons of cash. I advocated LOUDLY at the board that we needed to cut our burn rate. We were heading into this most recent recession but it wasn’t fully known yet. We were SMOKING cash.

Entrepreneur 306

Entrepreneur Burn Rate Cofounder Sales 306

YoungUpstarts

MAY 19, 2016

Use burn rate as an example. If you don’t understand how much money your company is burning through each month, how can you expect to intelligently talk about your fiscal health? To become part of the surviving half, use these methods to ensure your startup’s structure stands strong. Read your books from cover to cover.

Technical Review 124

Technical Review Burn Rate IP Intellectual Property 124

Startup Professionals Musings

APRIL 10, 2016

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate?

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Startup Professionals Musings

APRIL 8, 2015

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate?

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

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

MARCH 25, 2010

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Then there are computer costs, trade shows, inventory, and a thousand other things. Check industry average statistics to make sure you are in the right range. Cash flow is king.

Forecast 151

Forecast Startup Burn Rate .Net 151

ReadWriteStart

APRIL 26, 2011

MicroVentures does the due diligence for investors, running a variety of checks on financials, forecasts, use of funds, burn rate and so on. Everything is disclosed fully to potential investors, who make their investments in exchange for equity in the companies.

Software Review 122

Software Review Accredited Investor Due Diligence Burn Rate 122

VC Cafe

NOVEMBER 2, 2019

In SaaS the main benchmarks being measured are revenue growth, sales efficiency (unit economics), churn and burn rate. Rob Go: How Much Traction Do You Really Need to Raise a Seed or Series A Round? Software as a Service (Saas) benchmarks. One of my favourite resources for SaaS benchmarking is The SaaS Napkin by Point Nine Capital.

B2C 141

B2C Technical Review Startup Retention 141

The Next Web

JANUARY 22, 2014

This would indicate that founders are generally being sensible with their bank balance, watching their burn rate closely and not taking more out until there’s more coming in. The closest tie between founder salary and another datapoint was found in revenue. Founder age and salary.

Salary 152

Salary Founder Entrepreneur Burn Rate 152

Hunter Walker

APRIL 17, 2022

What they really meant was that they enjoyed a lifestyle that was built around fees in addition to profit sharing, had a high personal burn rate, and were risk averse to putting more of their capital in the game. In many cases this was kind of a b t answer to be honest. Nice things are nice.

Burn Rate 152

Burn Rate Salary Early Stage .Net 152

YoungUpstarts

JUNE 20, 2019

While additional personnel is crucial to scale the product, misaligned hires will increase burn rate without a concurrent jump in productivity and meaningful growth. Avoiding churn is also key in monitoring burn rate.

Technical Cofounder 113

Technical Cofounder Burn Rate Seed Stage Cofounder 113

Both Sides of the Table

AUGUST 9, 2011

Companies raised too much money in 2005-08 and had high burn rates. When this period was fresh, in Sept 2009, I wrote a very detailed assessment of what I thought had just happened. tl;dr summary. VCs were very active in this period. So no new deals got done.

Stock 305

Stock Technical Review Marketing Greece 305

crowdSPRING Blog

OCTOBER 24, 2014

What is the Right Burn Rate at a Startup Company? | Benchmarking SaaS Startup Efficiency with Revenue per Employee Metrics | by @ttunguz – crowdspring.co/1sRVdjm. Why You Should Find Product-Market Fit Before Sniffing Around For Venture Money | Co.Labs – crowdspring.co/1sRVsv5. by @msuster – crowdspring.co/1qKWc0z.

Social Media 95

Social Media Small Business Design Media 95

The Next Web

DECEMBER 2, 2013

Considering Facebook’s scale, the company is now in the business of operating power plants to operate its servers, therefore, Schippers estimates that Facebook has a $30 million dollar monthly burn rate just for hosting. Suddenly, those multi-million dollar financing rounds that startups raise don’t seem so outrageous! 4) WhatsApp.

Cost 168

Cost San Francisco New York City Ruby 168

View from Seed

OCTOBER 24, 2019

As a first time founder, having a few million dollars in the bank after a successful seed raise may seem like a huge amount of capital, and it’s easy to lose discipline around your burn rate.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

Up and Running

APRIL 6, 2020

This can be a daunting task, but the best place to start is understanding and calculating your cash burn rate and your cash runway. How do you calculate the burn rate? This total number is your Gross Burn Rate. Gross burn rate = (Total variable expenses + Total fixed expenses).

Burn Rate 100

Burn Rate Forecast SBA Cash Position 100

Both Sides of the Table

SEPTEMBER 28, 2014

I was reading Danielle Morrill’s blog post today on whether one’s “ Startup Burn Rate is Normal. Danielle goes through some commentary from Bill Gurley, Fred Wilson and Marc Andreessen about burn rate and then goes on to discuss her own burn rate and others publicly weigh in.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Genuine VC

FEBRUARY 9, 2011

What is the burn rate and how much cash is in the bank now? The timing of the last round is also important - the closer you are to joining a company in conjunction with a financing event, the more recently validated it is by a professional investor – but also the value of your financial upside is less.

Startup 146

Startup Burn Rate Technical Review Down Round 146