Steve Blank

MARCH 17, 2020

The questions every startup or small business CEO needs to ask now are: What’s my Burn Rate and Runway? Burn Rate and Runway. To answer the first question, take stock of your current gross burn rate i.e. how much cash are you spending each month. What does your new business model look like? How do you know?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Up and Running

APRIL 30, 2020

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. Before I started my own business I was a market researcher, doing forecasts. Scenario analysis optimizes the combination of numbers and intuition.

Forecast 120

Forecast Balance Sheet Burn Rate Software Review 120

Startup Professionals Musings

FEBRUARY 5, 2021

Most aspiring entrepreneurs understand that you can’t build a business if you won’t commit to delivering a product or service, but many are hesitant or refuse to commit to any financial forecasts. Yet every business requires revenue and volumes, as certainly as it requires a product to sell. Forecast sales-volume expectations.

Forecast 369

Forecast Burn Rate Startup Widget 369

Startup Professionals Musings

OCTOBER 16, 2023

Most aspiring entrepreneurs understand that you can’t build a business if you won’t commit to delivering a product or service, but many are hesitant or refuse to commit to any financial forecasts. Yet every business requires revenue and volumes, as certainly as it requires a product to sell. Forecast sales-volume expectations.

Forecast 290

Forecast Burn Rate Widget Business Plan 290

David Teten

NOVEMBER 26, 2019

I encourage entrepreneurs to correct course with a re-forecast early and often. Sean Colrock, Director of Client Partnerships at Wiss & Company , suggests at a minimum you track: cash on hand; fume date; and burn rate. The organization replaced the budget with a quarterly forecasting and planning process.…

Agile 60

Agile Management Forecast Silicon Valley 60

Steve Blank

FEBRUARY 13, 2024

Getting it Right Apple’s entry into new markets by creating new product categories – iPods, iPads, iPhones – is unprecedented in the history of the modern corporation – $300 billion (75% of their revenue) is from non-computer hardware.

Search 302

Search Marketing Forecast Burn Rate 302

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

Up and Running

AUGUST 21, 2014

What a lot of companies or startups don’t realize is when you put up forecast together, it’s difficult if you’re a startup. The other thing that they’re going to ask you is average revenue per account or per user or per customer. It’s what’s going to make you most attractive to an investor.

Metrics 84

Metrics Startup Churn Rate Forecast 84

Startup Professionals Musings

JANUARY 4, 2015

Most aspiring entrepreneurs understand that you can’t build a business if you won’t commit to delivering a product or service, but many are hesitant or refuse to commit to any financial forecasts. Yet every business requires revenue and volumes, as certainly as it requires a product to sell. Forecast sales-volume expectations.

Forecast 120

Forecast Entrepreneur Burn Rate Widget 120

Up and Running

OCTOBER 7, 2019

Many startups focus on growth (instead of profits) and often need to track KPIs that may be different from those used by established businesses: Burn rate : indicates the company’s negative cash flow or how quickly it’s spending money. Activation rate: measures how many visitors are engaging with your website or app. Sales KPIs.

Founder 71

Founder Retention Metrics Technical Review 71

Startup Professionals Musings

DECEMBER 11, 2017

You need 5 percent or more of revenue for marketing, more for new development, and people costs will double as you add benefits, insurance, training, IT and processes. If you want to be assessed as a “premium” acquisition candidate down the road, an aggressive but reasonable target might be doubling revenue each year.

Burn Rate 144

Burn Rate Forecast Angel Investor Revenue 144

Both Sides of the Table

OCTOBER 14, 2015

But like many companies over the past five years it hired aggressively and probably had some degree of straying off of a core strategy and some amount of excess jobs relative to its current revenue forecasts and opportunities. ” It goes like this: What is your net burn rate? What is your cash balance?

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

Both Sides of the Table

MARCH 30, 2016

If you want to see what was on my mind – I started foreshadowing change publicly in October 2015 with a forecast of what I expected in 2016 VC funding markets at a presentation I gave at the annual Cendana VC/LP conference hosted by Michael Kim. CMRR (contracted monthly recurring revenue) grow 100% y/y. FOMO was NOMO.

Balance Sheet 150

Balance Sheet Burn Rate Valuation Forecast 150

Up and Running

SEPTEMBER 9, 2020

When you put together a cash flow forecast , you’ll have a solid prediction of what your business’s cash situation will look like in the coming months. Your cash flow forecast will tell you all of this. First, you should make sure that you have a good cash flow forecast to predict your future cash flow. Not necessarily.

Burn Rate 83

Burn Rate Forecast Cash Position Employee 83

Startup Professionals Musings

AUGUST 7, 2015

Every customer understands that your solution has to generate more revenue than cost, but you should not put that data in a customer pitch. Projected revenues and expenses over the strategic period. This allows them to calculate burn rates, break-even points and forecast the company valuation over time.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

ithacaVC

OCTOBER 29, 2011

This post covers cash forecasts and financial projections. As Brad points out, most startups start with a cash forecast to track expenses because it takes a bit of time to figure out how to best project revenues (the top line of the financial projections). Even for a recovering lawyer (me), it is common sense.

Revenue 49

Revenue Finance Burn Rate Forecast 49

Up and Running

MAY 28, 2015

The break-even analysis table calculates a break-even point based on fixed costs, variable costs per unit of sales, and revenue per unit of sales. We call that “burn rate” these post-Internet days. It depends on averaging your per-unit variable cost and per-unit revenue over the whole business.

Forecast 60

Forecast Burn Rate Revenue Sales 60

Berkonomics

DECEMBER 18, 2014

First, the VC’s ordered that the company ramp its burn rate (monthly losses in cash) to over $800,000, which I could not fathom. But the CFO let the spending rate continue to increase out of balance with the board-approved budget which projected revenues to ramp, reducing the monthly cash burn.

Balance Sheet 71

Balance Sheet Burn Rate Cash Position Forecast 71

Both Sides of the Table

FEBRUARY 14, 2016

Valuing any company can be difficult because it requires a degree of forecasting future growth & competition and ultimately the profits of the organization. Huge funding increases lead to massive wage inflation, rent inflation and thus higher burn rates. You’ll see here that in 2007 people were willing to pay 7.7x

Valuation 150

Valuation Down Round Startup Later Stage 150

Up and Running

MAY 22, 2018

You’ll have to actually demonstrate that you’re generating revenue and increasing your client base. Demonstrating to investors that you have a handle on key business metrics as they relate to your business model and forecast is essential. Expenses that were surpassed by revenue. Nerdy term: Burn rate.

Exit Strategy 90

Exit Strategy Angel Investor Search Elevator Pitch 90

Berkonomics

JULY 1, 2021

First, the VC’s ordered that the company ramp its burn rate (monthly losses in cash) to over $800,000 a month, which I could not fathom. But the CFO let the spending rate continue to increase out of balance with the board-approved budget which projected revenues to ramp, reducing the monthly cash burn.

Balance Sheet 62

Balance Sheet Cofounder Cash Position Burn Rate 62