Feld Thoughts

NOVEMBER 18, 2013

Here’s the punchline: if you run your company as if you have closed a VC equity financing round even though you actually closed a convertible debt round, you’ll be in much better shape when it comes time to raise your Series A financing. There is no discussion of burn, runway, and more financing yet.

Burn Rate 152

Burn Rate Equity Software Review Early Stage 152

Both Sides of the Table

JULY 13, 2013

I got a job at a bank, and I worked in their corporate finance group. We had a finance group for all of the bank branches based in San Diego, and I wrote programs to download stuff from the mainframe so we could do analysis three days faster than they could send us the data. Comp sci in the 80s was terrible.

Cofounder 337

Cofounder Technical Cofounder Startup San Diego 337

View from Seed

OCTOBER 24, 2019

Pre-seed investing should be super simple, so any signs of pro-rata rights, tranched financings, charging the company for value-added services, etc. As an inexperienced founder, you are very likely to take at least two rounds of financing before a series A, so the round to try to skip is any sort of second seed. should be avoided.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

YoungUpstarts

MAY 19, 2016

Speaking intelligently about your company’s current (and future) performance means regular check-ins with your finances. 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?

Technical Review 124

Technical Review Burn Rate IP Intellectual Property 124

VC Cafe

NOVEMBER 2, 2019

In SaaS the main benchmarks being measured are revenue growth, sales efficiency (unit economics), churn and burn rate. Other resources for benchmarking deep tech startups: European investment bank – financing the deep tech revolution SOSV – Deep tech investing 101 BCG – the dawn of the deep tech ecosystem.

B2C 141

B2C Technical Review Startup Retention 141

The Next Web

DECEMBER 2, 2013

Considering Facebook’s scale, the company is now in the business of operating power plants to operate its servers, therefore, Schippers estimates that Facebook has a $30 million dollar monthly burn rate just for hosting. Suddenly, those multi-million dollar financing rounds that startups raise don’t seem so outrageous!

Cost 168

Cost San Francisco New York City Ruby 168

Berkonomics

OCTOBER 5, 2023

Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies. But first… There is a relationship between time and money that is more complex than most managers think. The financial pain of unplanned delays.

Silicon Valley 118

Silicon Valley Burn Rate Angel Investor Down Round 118

Feld Thoughts

SEPTEMBER 16, 2011

This resulted in an annualized burn rate more in the neighborhood of $55,200 ($4,600 * 12). However, Jane realized that $3430 associated with the new office space security deposit and rennovations is essentially a one-time expense.

Balance Sheet 125

Balance Sheet Fractional CTO Burn Rate Salary 125

Genuine VC

FEBRUARY 9, 2011

The timing of the last round is also important - the closer you are to joining a company in conjunction with a financing event, the more recently validated it is by a professional investor – but also the value of your financial upside is less. What is the burn rate and how much cash is in the bank now?

Startup 146

Startup Burn Rate Technical Review Down Round 146

This is going to be BIG.

MARCH 1, 2010

It’s often some combination of the idea not being big enough to sustain a venture exit or the company just not being appropriate for venture financing. My company was not well executed enough to achieve venture capital financing—and that wasn’t the city’s fault, it was mine. I was there, too. They’re not “dumb Wall Street money”.

New York City 120

New York City New York Startup Burn Rate 120

Berkonomics

AUGUST 10, 2017

Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies. There is a relationship between time and money that is more complex than most managers think.

Silicon Valley 97

Silicon Valley Burn Rate Angel Investor Down Round 97

Both Sides of the Table

MAY 2, 2015

A great finance leader is on top of your numbers with such precision that you don’t have to worry about it. 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.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Up and Running

APRIL 22, 2020

They want to understand your burn rate and cash runway to see how likely you are to pay back the loan, and in a crisis, a hit in sales, revenue, and overall cash flow can help prove that you were affected by COVID-19. If you don’t qualify for an SBA Disaster Loan you may want to explore other funding options.

SBA 139

SBA Forecast Software Review Business Plan 139

Berkonomics

MARCH 30, 2010

Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies. There is a relationship between time and money that is more complex than most managers think. Email readers continue here.]

Silicon Valley 85

Silicon Valley Burn Rate Angel Investor Down Round 85

techcrunch.com

FEBRUARY 26, 2013

He knows how to advise entrepreneurs on hiring/firing, running teams, managing funding, when/how to control burn rate, and making other tough management decisions in the real environment of startups. In contrast to this personal view of an ideal board, many boards are often polite and agreeable, in many cases to a fault.

Burn Rate 87

Burn Rate Hiring Engineer Entrepreneur 87

Up and Running

APRIL 30, 2020

Financing options: Can I get an emergency payroll loan? 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. What if it lasts six months? Does that impact your business? How does that impact the numbers?

Forecast 120

Forecast Balance Sheet Burn Rate Software Review 120

David Teten

NOVEMBER 26, 2019

Sean Colrock, Director of Client Partnerships at Wiss & Company , suggests at a minimum you track: cash on hand; fume date; and burn rate. Peter Nesbitt, VP of Finance at Teampay , said, “Forecasting is exceptionally challenging in practice, especially as end users drive an era of distributed spending.

Agile 60

Agile Management Forecast Silicon Valley 60

Both Sides of the Table

MAY 23, 2010

Often when startups who have raised venture capital need another round of financing they will turn to their existing investors to give them money before raising from outsiders. a loan) that is later converted to equity at the time of the next financing. You’ve kept a really low burn rate and paid yourself a very small salary.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Steve Blank

APRIL 26, 2022

At the turn of the century after the dotcom crash, startup valuations plummeted, burn rates were unsustainable, and startups were quickly running out of cash. For existing investors, sometimes it was a “pay-to-play” i.e. if you don’t participate in the new financing you lose. This article previously appeared in TechCrunch.

Cram Down 417

Cram Down Founder Venture Capital Recapitalization 417

VC Cafe

FEBRUARY 6, 2011

R&D outside SV is normally cheaper, so it helps you keeping your burn rate low. Better to start with contacts with other entrepreneurs and founders, hopefully those that have already been funded, and approach angels and VC’s through them ( Jüri Kaljundi, Have raised angel & VC financing).

Silicon Valley 104

Silicon Valley Startup Seed Stage Delaware 104

Steve Blank

FEBRUARY 22, 2010

How do we finance the company, etc. Regardless of your type of business model you should be tracking cash burn rate, months of cash left, time to cash flow breakeven. What’s the distribution channel? How do we price and position the product? How do we create end user demand? Who are our partners? Retained 90+/Total Actives %.

Balance Sheet 307

Balance Sheet Startup Burn Rate Metrics 307

Mucker Lab

MAY 28, 2020

More and more investors have begun to shun high burn rates. 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).” 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

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Finance is mission critical, for instance – it just appears on a recurring basis.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Startup Professionals Musings

DECEMBER 15, 2014

Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. When you put your own financing on the line, your partners, your team, and eventually your customers will know that you are committed to solving their problem.

Bootstrapping 276

Bootstrapping Entrepreneur Startup Burn Rate 276

View from Seed

FEBRUARY 12, 2020

Sometimes, investors might get at this in more indirect ways like commenting about other financing rounds or casually throwing out a number and watching your reaction. The investor is trying to figure out whether there is likely to be a mismatch in expectations down the road around growth rate, burn rate, or the ultimate exit.

Term Sheet 364

Term Sheet Burn Rate Founder Partner 364

Startup Professionals Musings

JUNE 28, 2013

Focusing on the burn rate and prioritizing every possible expense will keep overhead down, help you stay lean, and achieve a higher profit earlier. When you put your own financing on the line, your partners, your team, and eventually your customers will know that you are committed to solving their problem.

Startup 264

Startup Burn Rate Bootstrapping Valuation 264

Steve Blank

JUNE 1, 2011

3) An experienced board brings an extensive network of customers, partners, help in recruiting, follow-on financing, etc. The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance. From a founder’s point of view there are three reasons for board meetings.

Silicon Valley 300

Silicon Valley Business Model Venture Capital Balance Sheet 300

Steve Blank

JUNE 1, 2011

3) An experienced board brings an extensive network of customers, partners, help in recruiting, follow-on financing, etc. The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance. From a founder’s point of view there are three reasons for board meetings.

Silicon Valley 273

Silicon Valley Business Model Venture Capital Balance Sheet 273

ReadWriteStart

JANUARY 27, 2011

For a more elaborate explanation of the deal, please read my blog post 1M/1M: Alternative Financing For Startups Using A Sales Channel Partner. Jeff has managed to keep his burn rate very low thus far, and a slow and steady crafting of the business is working nicely. The business is already profitable with $2.9

Dilution 114

Dilution Revenue Finance Entrepreneur 114

Version One Ventures

JANUARY 28, 2013

Seed financing grew from 89 fundings in Q1 2009 to more than 500 in Q3 2012. That means there are a lot more seeded startups out there: an excess demand for a limited supply of Series A financings. As an example, Version One has more than 50% of its funds reserved for follow-on financing. Do your homework on potential investors.

Burn Rate 140

Burn Rate San Francisco Vesting Finance 140

abovethecrowd.com

FEBRUARY 24, 2015

Historically, different financial institutions specialized in different stages, because the assessment of risk and opportunity was considered unique at each stage — for example, a seed investor was unlikely to do late-stage financing, and vice versa. Some have argued that each of these companies would already be public in a prior era.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

Both Sides of the Table

FEBRUARY 25, 2019

Here are some observations I have from this exposure: If a company moves from strength-to-strength with predictable outcomes, easy financings, low staff turn-over, limited competitive threats then the composition of the board probably doesn’t matter as much. What are the kinds of difficult tasks that need to be solved by boards?

LP 269

LP Startup Burn Rate Stock Options 269

Up and Running

SEPTEMBER 17, 2014

This includes a general understanding of the finances. This is the rate at which a company uses up its capital to finance overhead before generating positive cash flow from operations. This is the rate at which a company uses up its capital to finance overhead before generating positive cash flow from operations.

Metrics 146

Metrics Burn Rate Entrepreneur Forecast 146

Startup Professionals Musings

NOVEMBER 28, 2012

Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. A variation on this theme is promising a burn rate to investors than you can’t deliver. Do not delegate this task.

Entrepreneur 274

Entrepreneur Intellectual Property LLC Burn Rate 274

Professor VC

NOVEMBER 14, 2011

in fees is a hefty transaction fee considering company will still have legal and other fees on the financing. I take CFO roles in early stage companies and participate on the management team during the early financings and business model development phases. I also teach Entrepreneurial Finance at San Jose State. 7.5 - 10.5%

SEC 54

SEC San Jose Angel Investor Accredited Investor 54

Startup Professionals Musings

JANUARY 7, 2014

Later, when your venture is trying to close on financing, or even going public, that forgotten partner surfaces, demanding their original share. A variation on this theme is promising a burn rate to investors than you can’t deliver. Do not delegate this task.

Startup 265

Startup Intellectual Property LLC Burn Rate 265

abovethecrowd.com

APRIL 20, 2016

Why the Unicorn Financing Market Just Became Dangerous…For All Involved. The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance which many Unicorn CEOs and investors are ill-prepared to navigate.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40