Startup Professionals Musings

JUNE 9, 2012

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater.

Forecast 238

Forecast Burn Rate .Net Business Model 238

Startup Professionals Musings

JULY 15, 2013

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater.

Forecast 238

Forecast Business Plan Burn Rate .Net 238

Startup Professionals Musings

MARCH 22, 2011

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater.

Forecast 230

Forecast Burn Rate Startup .Net 230

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 Basics The starting point — the 101 — is knowing the difference between gross burn and net burn. In short, it’s the amount of cash you’re burning every month (vs.

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

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. Pragmatic cost cuts are always possible and often productive. Start early.

Burn Rate 150

Burn Rate Cap Table Startup Dilution 150

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 missed our sales targets that year by 66% and the next year by 45% and never really cut costs very much. We were SMOKING cash. The company incinerated cash.

Entrepreneur 306

Entrepreneur Burn Rate Cofounder Sales 306

Startup Professionals Musings

FEBRUARY 17, 2021

It wasn’t so many years ago that starting a new e-commerce business on the Internet was a complex custom development project, usually costing a million dollars or more. Almost anyone can start a company today on a shoestring budget, following these cost-cutting recommendations: Establish a solid legal structure for your business.

Cost 405

Cost Entrepreneur Burn Rate Social Media 405

Feld Thoughts

SEPTEMBER 16, 2011

They also haven’t launched a product, so there is no corresponding “cost of goods sold” – the direct cost of delivering their product. This results in a gross margin of $0, where gross margin is revenue – cost of goods sold. The default Quickbooks setup uses “Income” to refer to “Revenue”.

Balance Sheet 129

Balance Sheet Fractional CTO Burn Rate Salary 129

Startup Professionals Musings

MARCH 25, 2010

Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater.

Forecast 151

Forecast Startup Burn Rate .Net 151

Feld Thoughts

NOVEMBER 18, 2013

Convertible debt financings have become an increasingly attractive approach for seed rounds because it delays the valuation discussion, costs less from a legal standpoint, and is an easier financial instrument to “keep raising more small amounts of money” on. The plan would have to get way tighter, way faster.

Burn Rate 155

Burn Rate Equity Software Review Early Stage 155

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. Typically, the sign-up process for startups costs $100, but those interested in trying MicroVenture can can submit their ideas for free using the code RWW. Discuss.

Software Review 122

Software Review Accredited Investor Due Diligence Burn Rate 122

Both Sides of the Table

AUGUST 9, 2011

The parallels to the music industry are too obvious even though the industry players, the medium and the cost structures are different. Companies raised too much money in 2005-08 and had high burn rates. I have always believed that TV was ripe for disruption. US TV advertising is $60 billion in its own right. tl;dr summary.

Stock 305

Stock Technical Review Marketing Greece 305

Up and Running

APRIL 22, 2020

Maintaining your business through the coronavirus crisis has likely led you to cut costs, revise your sales projections, and potentially seek out a loan to help you stay afloat. Second, if a requested loan is below a certain amount, depending on the size of the lender, the cost to service that loan is too high to make it worth it for them.

SBA 139

SBA Forecast Software Review Business Plan 139

YoungUpstarts

JUNE 20, 2019

The sheer inefficiency cost the company an exorbitant amount of money. 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

Startup Professionals Musings

JUNE 18, 2012

I come from a high-tech software background, and only a few years ago, it would cost at least a million dollars ($1M) for a team of professionals to produce any commercial software product. Now, with open source software components, and low-cost development tools, the same job can be done by one good hacker for a few thousand dollars.

Cost 255

Cost SEM Burn Rate Startup 255

View from Seed

OCTOBER 24, 2019

Also, the benefit of raising a pre-seed from great partners probably outweighs the cost. 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

Startup Lessons Learned

MARCH 27, 2009

While some cost-cutting measures reduce that number, others increase it. In lean times, it’s most important to focus on cutting costs in ways that speed you up, not slow you down. Otherwise, cutting costs just leads to going out of business a little slower.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117

Up and Running

FEBRUARY 20, 2015

If you’re running a subscription business , you’ll want to track churn rate, monthly recurring revenue, lifetime value, and so on. However, there are a number of metrics that every business owner should know, including cash flow, accounts payable, accounts receivable, direct costs, operating margin, net profit, and cash burn rate.

Metrics 60

Metrics Burn Rate .Net Churn Rate 60

crowdSPRING Blog

DECEMBER 12, 2014

It’s Absurd That Health Care Costs Are So Confusing – crowdspring.co/1yDomRJ. Don’t Get Burned by Your Burn Rate – crowdspring.co/159KKrk. How to Motivate Employees in Less Than 5 Minutes – crowdspring.co/1CzhuZY. Setting up shop: 5 steps to opening a store | Money – crowdspring.co/1yDojFH. 1vCXLVU.

Social Media 100

Social Media Small Business Design Media 100

Up and Running

APRIL 30, 2020

What will be the cost of letting somebody go when it includes recruiting and retaining a replacement later when the economy recovers? Each scenario combines the key numbers in the hypothetical case and explores the impact on the bottom line, and helps you define your cash burn rate and runway. Build scenarios using spreadsheets.

Forecast 120

Forecast Balance Sheet Burn Rate Software Review 120

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

Transformify

AUGUST 27, 2017

Their investors may push them into that direction too, as the high burn rate is often seen as a prerequisite for high growth. You don’t have the right people on board, you are burning cash and the work is not done, at its worst, your product is already live and you are losing clients due to software bugs and poor user experience.

Hiring 64

Hiring Software Review Burn Rate Startup 64

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

This is going to be BIG.

MARCH 1, 2010

Even in the Valley, it will cost you over 20k to pay to recruit a developer. If you want to build your startup in the middle of nowhere and optimize purely for low burn rate, then sure, I’m sure you could work more cheaply elsewhere. That being said, is low burn rate really what you should be optimizing for?

New York City 114

New York City New York Startup Burn Rate 114

Both Sides of the Table

JULY 16, 2013

The company with no revenue and a $150k burn rate that raised $2.5 I often wonder why they didn’t find a way to bring in some revenue to cover costs. In this situation I think we should be increasing burn rate and not immediately focusing on revenue [I do sometimes believe this]. I see this weekly.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

Up and Running

APRIL 27, 2020

Current businesses are finding ways to pivot their business models, revisiting their budgets, and developing new forecasts to minimize their burn rate and maximize their available cash runway. In an economic downturn, businesses and consumers alike are looking to cut costs, which may allow you to step in with your answer.

Software Review 113

Software Review Lean Forecast Business Plan 113

Startup Professionals Musings

FEBRUARY 5, 2021

If you don’t have a destination, don’t waste your money trying to get there, and don’t expect anyone to support you along the way Projecting financials is a natural extension of the homework every entrepreneur needs to do on customer opportunity size, product costs, pricing, competition and customer value. Quantify overhead costs.

Forecast 369

Forecast Burn Rate Startup Widget 369

Both Sides of the Table

MAY 2, 2015

It’s such a tricky balance between being cost-focused & scrappy versus being impractical with how you spend your time. They can show the projections on what this does to burn rate. What if you are measuring CAC wrongly and you’re really not acquiring customers cost effectively? And so must you.

Operations 150

Operations Metrics Early Stage Non-Compete 150

David Teten

NOVEMBER 26, 2019

Inevitably, things cost more and take longer than expected. Sean Colrock, Director of Client Partnerships at Wiss & Company , suggests at a minimum you track: cash on hand; fume date; and burn rate. I encourage entrepreneurs to correct course with a re-forecast early and often.

Agile 60

Agile Management Forecast Silicon Valley 60

Startup Professionals Musings

OCTOBER 16, 2023

Projecting financials is a natural extension of the homework every entrepreneur needs to do on customer opportunity size, product costs, pricing, competition and customer value. Per-unit cost less cost of goods sold is your gross profit or margin. Quantify overhead costs. It’s amazing how fasts costs escalate as you grow.

Forecast 290

Forecast Burn Rate Widget Bootstrapping 290

VC Cafe

FEBRUARY 6, 2011

If you just travel in, don’t attempt it, it will be an expensive waste of energy/time/cost that will get you polite meetings but no engagement. R&D outside SV is normally cheaper, so it helps you keeping your burn rate low. You are then “certified&# for local capital raising and will get over hump.

Silicon Valley 104

Silicon Valley Startup Seed Stage Delaware 104

Startup Professionals Musings

FEBRUARY 15, 2011

I come from a high-tech software background, and only a few years ago, it would cost at least a million dollars ($1M) for a team of professionals to produce any commercial software product. Now, with open source software components, and low-cost development tools, the same job can be done by one good hacker for a few thousand dollars.

Entrepreneur 235

Entrepreneur SEM Burn Rate Social Network 235

Gust

JUNE 10, 2012

I come from a high-tech software background, and only a few years ago, it would cost at least a million dollars ($1M) for a team of professionals to produce any commercial software product. Now, with open source software components, and low-cost development tools, the same job can be done by one good hacker for a few thousand dollars.

Cost 139

Cost SEM Burn Rate Startup 139

YoungUpstarts

SEPTEMBER 30, 2014

Think of it like this: the longer your startup debt is not repaid, the more interest it will accrue over time and, ultimately, the more it will cost you in the long run. Watch your burn rate — the amount of capital you use up every month. Cash Flow is Still King.

Burn Rate 248

Burn Rate Startup Cloud Management 248

Startup Professionals Musings

JULY 27, 2014

It wasn’t so many years ago that starting a new e-commerce business on the Internet was a complex custom development project, usually costing a million dollars or more. Almost anyone can start a company today on a shoestring budget, following these cost-cutting recommendations: Establish a solid legal structure for your business.

Entrepreneur 260

Entrepreneur Burn Rate Social Media LLC 260

Startup Professionals Musings

DECEMBER 15, 2014

Count on several months of effort and costly assistance to court investors, with less than a 10% success rate. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. The best partners are ones who share costs and risks.

Bootstrapping 276

Bootstrapping Entrepreneur Startup Burn Rate 276

Startup Professionals Musings

JUNE 28, 2013

Count on several months of effort and costly assistance to court investors, with less than a 10% success rate. Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. The best partners are ones who share costs and risks.

Startup 264

Startup Burn Rate Bootstrapping Valuation 264