Both Sides of the Table

MAY 28, 2018

There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch. Founder: “$8–10 million” VC: “What’s your current burn rate?” VC: “So at a constant rate of burn rate you’d be raising enough for 2.5–3

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

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. If you’re an early stage company, that number may be zero.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

View from Seed

OCTOBER 24, 2019

Hopefully, by bringing on strong partners early, you will get great advice and support to minimize your overall dilution down the road. They find weak pre-seed investors or angels who are almost predatory in their early stage pricing and add no value. Experienced founders: Consumer.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

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? Obtain a Confidential Information and Invention Assignment Agreement as early as possible to make sure the IP is clearly (and legally) assigned.

Technical Review 124

Technical Review Burn Rate IP Intellectual Property 124

YoungUpstarts

JULY 31, 2019

Billions of dollars are being poured into companies that have yet to clear the value chasm, as entrepreneurs use early traction that isn’t necessarily financially-oriented, but shows a certain level of uptick or success, to raise capital and convince early stage investors that their horse is the one to bet on.

Cofounder 127

Cofounder Burn Rate Technical Cofounder Seed Capital 127

YoungUpstarts

JUNE 20, 2019

Over the years, the Truss team has worked with several early-stage startups, and noticed a consistency in inter-series problems (regardless of the industry). While additional personnel is crucial to scale the product, misaligned hires will increase burn rate without a concurrent jump in productivity and meaningful growth.

Technical Cofounder 113

Technical Cofounder Burn Rate Seed Stage Cofounder 113

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

Startup Professionals Musings

JULY 9, 2014

The partner most obsessed with the startup lifestyle tests the water by going to work in an early-stage startup, similar to one they might hope to start someday. What is the startup cash burn rate per month? How much money has been invested so far? Are more investment rounds required (runway)?

Technical Review 250

Technical Review Stock Options Due Diligence Silicon Valley 250

Mucker Lab

MAY 28, 2020

The anxiety is growing so intense that CB Insights is now charging $6,895 for its own “List of Early-Stage Tech Startups Running Out of Cash (Dying).” More and more investors have begun to shun high burn rates. To be clear, I’m not suggesting that you stockpile capital. Hoarding is not a solution to premature scaling.

Startup 78

Startup Cofounder Burn Rate Technical Review 78

Both Sides of the Table

OCTOBER 12, 2010

One of the biggest mistakes I see early-stage startups making is hiring “seasoned&# sales professionals or hiring people too senior, too early. The problem is that in an early stage business there probably isn’t a perfect fit between your early product and a customer’s needs.

Hiring 346

Hiring Sales Startup Early Stage 346

Startup Professionals Musings

OCTOBER 16, 2023

Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Check competitor numbers and industry average statistics to get you in the right range. Calculate investment amounts and timing. Initial sales success means more cash will be needed for inventory, receivables, facilities and people.

Forecast 290

Forecast Burn Rate Widget Business Plan 290

Startup Professionals Musings

OCTOBER 18, 2015

The partner most obsessed with the startup lifestyle tests the water by going to work in an early-stage startup, similar to one they might hope to start someday. What is the startup cash burn rate per month? How much money has been invested so far? Are more investment rounds required (runway)?

Technical Review 120

Technical Review Entrepreneur Stock Options Due Diligence 120

Feld Thoughts

NOVEMBER 18, 2013

Following is his advice to early stage entrepreneurs for creating structure in their company. So, I’ll explain my reasoning through the story of ASC, a fictitious company that has a combination of characteristics I’ve seen across a number of early stage companies. The plan would have to get way tighter, way faster.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

The Next Web

JANUARY 22, 2014

While most readers saw it as a good thing that founders of early-stage companies tended to pay themselves low salaries, some readers pointed out that the self-reported data lacked some important considerations. 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

Both Sides of the Table

MAY 2, 2015

What I love about my job is getting to see teams of super-early-stage companies develop ideas that while raw have potential to make an impact on the market. They can show the projections on what this does to burn rate. And I have seen inefficient early-stage CEOs staying up late working through QuickBooks entries.

Operations 150

Operations Metrics Early Stage Non-Compete 150

ithacaVC

MARCH 14, 2011

At the early stages of a startup, the founding team is probably the most important variable of success. Focusing on the early stage, the founding team typically will have a tech oriented founder and a business oriented founder. The management team continues as the critical success factor.

Early Stage 45

Early Stage Founder Burn Rate Cofounder 45

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. Steve Bennet.

Burn Rate 28

Burn Rate San Jose Silicon Valley Angel Investor 28

Hunter Walker

FEBRUARY 20, 2022

Bring your burn rate down, crowdfund from your community of users, do whatever you can to make it to the other side of the disillusionment trough. More recently podcasting ventures seem to have only reached exit values which have been solid for founders and angel investors, but well below “fund returning” for multibillion AUM firms.

Marketing 119

Marketing Burn Rate Angel Investor Early Stage 119

Startup Professionals Musings

NOVEMBER 2, 2012

My advice to founders out there is to not volunteer too much, but be open and honest in the face of direct questions like the following: What is your burn rate and runway today? Some founders try to deflect these questions by talking incessantly, so you often need to be calm, patient, and persistent to get the answers.

Due Diligence 244

Due Diligence Sweat Equity Burn Rate Intellectual Property 244

The Next Web

MARCH 8, 2014

Jason Lemkin is the Managing Director at Storm Ventures , a venture capital firm focusing on early-stage enterprise and IT companies, including MobileIron , Marketo and GuideSpark. But as an early-stage fund, it takes a lot of time for companies to mature. It certainly did to me when I was an entrepreneur.

Partner 138

Partner Burn Rate Early Stage IPO 138

Professor VC

SEPTEMBER 26, 2011

How would Billy Beane have done as an early stage investor? Im still not convinced that "gut feel" isnt a good way to invest at the early stage, but this can certainly get rid of over-thinking and provides diversification and investments in entrepreneurial teams that would be otherwise overlooked. ProfessorVC. at 2:32 PM.

Technical Review 38

Technical Review Early Stage San Jose Angel Investor 38

Startup Professionals Musings

DECEMBER 16, 2013

My advice to founders out there is to not volunteer too much, but be open and honest in the face of direct questions like the following: What is your burn rate and runway today? Some founders try to deflect these questions by talking incessantly, so you often need to be calm, patient, and persistent to get the answers.

Due Diligence 253

Due Diligence Sweat Equity Intellectual Property Burn Rate 253

Steve Blank

JUNE 1, 2011

The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance. Why don’t we have standards for what metrics VC’s want to see from their early stage startup teams? Early stage board meetings are often clones of large company board meetings.

Silicon Valley 290

Silicon Valley Business Model Venture Capital Balance Sheet 290

Steve Blank

SEPTEMBER 7, 2009

I think Customer Development (iterative model) helps by putting a strong thought in the mind (at a very early stage) that you could be wrong unless the customer agrees; this helps the mind to be more receptive. Isso sem mencionar que, dependendo do problema, em alguns casos fica bastante difícil “voltar atrás&#.

Customer Development 224

Customer Development Developer Customer Silicon Valley 224

Both Sides of the Table

JULY 13, 2013

You’ve got entrepreneurs and founders who are really – a lot of them are in the very early stage of their startup. And for every time I’ve felt hugely stressed that our burn rate was getting too high, and I didn’t know who else was going to fund the company, and I’m all in on this company, right?”

Cofounder 337

Cofounder Technical Cofounder San Diego Startup 337

Steve Blank

JUNE 1, 2011

The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance. Why don’t we have standards for what metrics VC’s want to see from their early stage startup teams? Early stage board meetings are often clones of large company board meetings.

Silicon Valley 258

Silicon Valley Business Model Venture Capital Balance Sheet 258

Steve Blank

AUGUST 27, 2012

I got to spend time inside his company while I was using their software to analyze early-stage ventures. Other weeks Yuri would be buffeted by the realities of his burn rate, declining bank account and depressing comments from customers. He was constantly in front of customers, listening, selling, installing and learning.

Founder 316

Founder Cofounder Advisory Board Burn Rate 316

Startup Professionals Musings

SEPTEMBER 5, 2011

My advice to founders out there is to not volunteer too much, but be open and honest in the face of direct questions like the following: What is your burn rate and runway today? Some founders try to deflect these questions by talking incessantly, so you often need to be calm, patient, and persistent to get the answers.

Due Diligence 237

Due Diligence Sweat Equity Intellectual Property Entrepreneur 237

Haystack

MAY 4, 2019

But, perhaps its as simple as the following — today with Zoom, Slack, and other modern communication tools, it may help certain founders to build in the early-stages outside the Bay Area — where teams can form and bond, where the runway can last a bit longer, and where the team can be insulated from the noise of 2019 San Francisco.

United States 87

United States Portfolio San Francisco New York City 87

Gust

DECEMBER 8, 2013

My advice to founders out there is to not volunteer too much, but be open and honest in the face of direct questions like the following: What is your burn rate and runway today? Some founders try to deflect these questions by talking incessantly, so you often need to be calm, patient, and persistent to get the answers.

Due Diligence 174

Due Diligence Sweat Equity Intellectual Property Burn Rate 174

The Equity Kicker

JANUARY 10, 2020

Nic Brisbourne is Managing Partner at Forward Partners, the UK’s leading early-stage VC, currently supporting the UK’s next generation of AI, e-commerce and marketplace businesses. I think we differ a little from the rest of the industry, though, particularly with our focus on early stage companies.

Partner 68

Partner Early Stage Portfolio Metrics 68

Both Sides of the Table

MAY 9, 2011

like how much burn rate), whether to sell the company, etc. I wrote about many of the early-stage startup mistakes here. Involve them in fund raising, hiring, strategy, etc. Publicly call them a co-founder. Don’t rule like a dictator. But … if you have very big disagreements about funding, risk levels (e.g.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

Startup Professionals Musings

AUGUST 20, 2010

My advice to founders out there is to not volunteer too much, but be open and honest in the face of direct questions like the following: What is your burn rate and runway today? Some founders try to deflect these questions by talking incessantly, so you often need to be calm, patient, and persistent to get the answers.

Due Diligence 229

Due Diligence Sweat Equity Intellectual Property Startup 229

Both Sides of the Table

MAY 23, 2010

So by offering convertible debt you can avoid a price discussion in the same way that angel investors sometimes do in order to win competitive early-stage deals. You’ve kept a really low burn rate and paid yourself a very small salary. You’ve been busting your arse on this opportunity for the past 18 months.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Professor VC

JANUARY 27, 2011

I strongly believe (at least for very early stage technology ventures) that you will get diminishing returns and arguably negative returns once you get past an initial threshold of team, product, market and financial diligence. I immediately jumped up and called "b t". This could include 2 short meetings and a couple of phone calls.

Technical Review 31

Technical Review Due Diligence Silicon Valley San Jose 31

The Equity Kicker

JULY 16, 2015

Team structure in early stage ecommerce and marketplace companies is a function of manpower and skills necessary to build the company and the founder(s)’ skillset(s). 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.

eCommerce 60

eCommerce Burn Rate Early Stage Hiring 60