article thumbnail

The Damaging Psychology of Down Rounds

Both Sides of the Table

” In the article I discussed the downside of raising capital at a too high of a price and referred people to a previous article I had written encouraging founders to raise “ At the Top end of Normal ” as opposed to stratospheric prices. The Damaging Psychology of Down Rounds. A down round.

article thumbnail

A heartbreaking story about time and money.

Berkonomics

What most managers miss is that every month cut from the time it takes to perform such tasks cuts the cost by the value of a month’s worth of fixed overhead or burn. Ignoring the cost of product for a moment to make a point, saving a month’s fixed overhead by making processes more efficient, could easily double profits for the year.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Founders – Use Your Down Round To Clean Up Your Cap Table

Feld Thoughts

One of my favorite lines in buried in the middle: “I’ve heard enough companies say “we simply can’t cut costs or it will hurt the long-term potential of the business” to get a wry smile. Pragmatic cost cuts are always possible and often productive.” I have two simple rules for founders in my head from this experience.

article thumbnail

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
article thumbnail

In Q4 2022, founders face tough choices

VC Cafe

It’s a tough time for a lot of startup founders right now. Many companies are now having to resort to tough measures in order to stay afloat, including layoffs, down rounds and tough terms from current investors. What is a founder to do? If the answer is yes, then a down round is likely the best path forward.

Founder 173
article thumbnail

Startup Funding – A Comprehensive Guide for Entrepreneurs

ReadWriteStart

It is going to cost a lot of money just to get the initial batch of products to test the market and would definitely require external funding. I have interacted with a lot of founders who funded their initial business expenses through credit cards. You might have seen that valuations of several unicorns were suddenly slashed down.

Startup 150
article thumbnail

Wasted time is money lost.

Berkonomics

What most managers miss is that every month cut from the time it takes to perform such tasks cuts the cost by the value of a month’s worth of fixed overhead or burn. Ignoring cost of product for a moment to make a point, saving a month’s fixed overhead by making processes more efficient, could easily double profits for the year.