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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs. In startup world low GM almost always equals death which is why many Internet retailers have failed or are failing (many operated at 35% gross margins).

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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

John Berger, Director Operations & Impact Solutions, Toniic , observed that this has clear investor benefits: “ The grace period became a feature because it benefits investors in regions like the US where there can be tax differences between short and long term gains. Typically promissory note or non-voting common stock, with covenants.

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Your need for a board grows with complexity.

Berkonomics

The operations of the corporation become more complex. Bank loans with restrictive covenants are taken on. I engineered the extraction of the outside investors, even at a near total loss. Then along comes either money or contracts from strategic or financial investors or partners. The number of employees grows.

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Why Crunch Modes Doesn't Work: Six Lessons

www.igda.org

As I dug around, I was stunned to discover that I was hardly the first one to figure this out: my observations have been common knowledge among industrial engineers for almost a century. Prosperity Covenant , Tom Walker. This conviction of Abbe still seems to hold true after millions of experiments over the whole globe.

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The need for a board grows with complexity

Berkonomics

The operations of the corporation become more complex. Bank loans with restrictive covenants are taken on. I engineered the extraction of the outside investors, even at a near total loss. Then along comes either money or contracts from strategic or financial investors or partners. The number of employees grows.