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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

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
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3 Ways Structure Can Take Your Tech Startup To New Heights

YoungUpstarts

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? Look no further than Google and Oracle , and you’ll see that no company is immune from IP impasses. Read your books from cover to cover.

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Fundraising Debt And How To Avoid It

YoungUpstarts

Instead of looking at traditional metrics such as EBITA (earnings before interest taxes and amortization) and MRR (monthly recurring revenue), early investors are compelled by intangibles such as charismatic leadership, a loyal team, exciting IP, an important name on an executive board, news coverage, etc. Fundraising debt.

Cofounder 114
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How Great, Operationally-Focused CFO’s Can Transform Your Business

Both Sides of the Table

They can show the projections on what this does to burn rate. Legal threats from other IP holders? But a great finance leader isn’t just budgeting but he or she is an consummate planning and they won’t take s**t from you about why you need to avoid hiring more staff until you close new contracts or raise money.

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How do seed VCs pick their investments?

Hippoland

Is there any special tech or IP here? [in May or may not ask this depending on if our hypothetical VC firm leads rounds or not] [What is a team’s burn rate?] [I have disputes about this one but that is a topic for another post] Problem / solution: What specific problem are you solving? [Why Why are you doing this? Motivation?]

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Startup Benchmarks

VC Cafe

In SaaS the main benchmarks being measured are revenue growth, sales efficiency (unit economics), churn and burn rate. Deep tech startups can take a risk on market timing, which means that there’s less traction to evaluate and more emphasis is put on the team and the defensibility of the IP.

B2C 141