Startup Professionals Musings

OCTOBER 5, 2014

Investors check your burn rate to assess your efficiency, and project your remaining runway before you run out of money and into a brick wall. Don’t wait until you are almost out of cash before managing every dollar spent, or looking for the next refueling from investors. Cashflow is a basic survival metric for every startup.

Burn Rate 262

Burn Rate Hockey Stick Entrepreneur Salary 262

Startup Professionals Musings

MAY 22, 2020

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate? How complex is the capitalization table? When did this effort really start, including pivots?

Technical Review 436

Technical Review Due Diligence Sweat Equity Burn Rate 436

Both Sides of the Table

SEPTEMBER 29, 2009

High burn-rates fueled by over investment – One of the most damning things that happened to the start-up markets in 97-00 and 05-08 was the overfunding of technology companies. Bu when you start to worry that the world is ending (as it seemed it was in late 2008 / early 2009) you tend to get worried about large burn rates.

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Steve Blank

SEPTEMBER 3, 2014

He was using 3 rd parties to build his app but he had no expertise on how to manage external developers. Speed keeps cash burn rate down while allowing you to converge on a repeatable and scalable business model. There were three problems with Dave’s startup. A Startup is Not Just About a Good Idea.

Cofounder 336

Cofounder Founder Technical Cofounder Coder 336

Both Sides of the Table

NOVEMBER 3, 2009

Great product managers who are not great business people still often fail. They are the most important document you can prepare to align your management team on where you THINK your business will go. Too aggressive about the rate of customer adoption? You might then slow down your burn rate or raise more money.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Steve Blank

SEPTEMBER 5, 2018

These bubble startups were actually guessing at their business model and did premature and aggressive hype and early company launches and had extremely high burn rates – all predicated on an IPO to raise more cash. Massive liquidity awaited the first movers to the IPO’s, and that’s how they managed their portfolios.

Lean 335

Lean Burn Rate Startup IPO 335

Steve Blank

NOVEMBER 2, 2009

In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) Lean Startups aren’t Cheap Startups « Steve Blank (tags: startup product-management strategy) [.] The Customer Development process (and the Lean Startup) is one way to do that.

Lean 263

Lean Silicon Valley Startup RSS 263

Startup Professionals Musings

SEPTEMBER 14, 2016

Investors check your burn rate to assess your efficiency, and project your remaining runway before you run out of money and into a brick wall. Don’t wait until you are almost out of cash before managing every dollar spent, or looking for the next refueling from investors. Cash flow is a basic survival metric for every startup.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

YoungUpstarts

AUGUST 31, 2019

Keep Cash Burn Low. Every startup, no matter how small or large, should have a clear understanding of its burn rate. The first step is to calculate your burn rate. The second step is to lower your burn rate and effectively increase the longevity of your startup. Here are some ways you can do this.

Burn Rate 176

Burn Rate Startup Lean Early Stage 176

Startup Professionals Musings

FEBRUARY 18, 2023

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate? How complex is the capitalization table? When did this effort really start, including pivots?

Sweat Equity 207

Sweat Equity Burn Rate Technical Review Intellectual Property 207

Both Sides of the Table

OCTOBER 12, 2010

If you can’t figure all of this out then adding a non-founder sales person isn’t going to solve your problems – it’s just going to add to your burn rate. As they become more senior they take on management responsibilities such as planning, forecasting, pipeline reviews, coaching staff, etc.

Hiring 346

Hiring Sales Startup Early Stage 346

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. That is, how much should your company be willing to lose in cash every month as you make investments in staff and equipment that funds technology, sales, marketing and management.

Burn Rate 212

Burn Rate Startup .Net Venture Capital 212

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. I walked through my logic, “well, if a customer installs your tool on his website he’s going to have to hire an entire staff to manage the project.

Entrepreneur 306

Entrepreneur Burn Rate Cofounder Sales 306

Steve Blank

APRIL 20, 2009

. * By the late 1930′s when HP started, a small group (measured in hundreds) of engineers who made radio tubes were building the valleys’ ecosystem for electronics manufacturing, product engineering and technology management. But in fact, most startups need to keep their burn rate low more [.] Who would have known?

Silicon Valley 302

Silicon Valley RSS San Francisco Technical Review 302

Feld Thoughts

NOVEMBER 18, 2013

This second kind of seed financing can be a double-edged sword for the entrepreneur and company if not very carefully managed. A review of the cash position, burn rate, and execution plan would have revealed there was not enough cash on hand to nail the pivot while leaving 3-6 months of time in market before raising again.

Burn Rate 153

Burn Rate Equity Software Review Early Stage 153

Both Sides of the Table

JULY 13, 2013

I started as a programmer, and then a database designer, and then a project manager, and I led conversion teams. And for every time I’ve felt hugely stressed that our burn rate was getting too high, and I didn’t know who else was going to fund the company, and I’m all in on this company, right?”

Cofounder 337

Cofounder Technical Cofounder Startup San Diego 337

YoungUpstarts

JULY 31, 2019

Cunningham’s term was coined to identify a specific problem in the tech industry, but the fundamental concept is universal — Ben Horowitz, for example, took Cunningham’s concept and applied it to management structures. .

Cofounder 127

Cofounder Burn Rate Technical Cofounder Seed Capital 127

The Next Web

DECEMBER 2, 2013

Henrik Werdelin , the Managing Partner of Prehype , a venture development firm based in New York City that has helped build companies like Tradable , Barkbox , FancyHands , Basno and Path , says recreating Twitter isn’t necessarily difficult, but the layered features will take time to get right. 1) Twitter. 4) WhatsApp. 8) Angry Birds.

Cost 168

Cost San Francisco New York City Ruby 168

Startup Professionals Musings

APRIL 10, 2016

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate? How complex is the capitalization table? When did this effort really start, including pivots?

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Startup Professionals Musings

APRIL 8, 2015

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate? How complex is the capitalization table? When did this effort really start, including pivots?

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

David Teten

NOVEMBER 26, 2019

Instead of budget approvals, monitor key metrics and give managers more flexibility. How should a growth company manage their budget? So here’s the solution I have recommended to some of my portfolio companies: “ agile budgeting ”, i.e., monitoring a few key variables while giving managers significant flexibility.

Agile 60

Agile Management Forecast Silicon Valley 60

YoungUpstarts

JUNE 20, 2019

Series B: Hiring and Developing Managers. While additional personnel is crucial to scale the product, misaligned hires will increase burn rate without a concurrent jump in productivity and meaningful growth. The psychological shifts required to go from being an individual contributor to a manager shouldn’t be underestimated.

Technical Cofounder 113

Technical Cofounder Burn Rate Seed Stage Cofounder 113

Berkonomics

OCTOBER 5, 2023

But first… There is a relationship between time and money that is more complex than most managers think. Fixed overhead for salaries, rent, equipment leases and more make up the majority of the “burn rate” (monthly expenses) for most companies. The art of good management. How about young or pre-revenue companies?

Silicon Valley 118

Silicon Valley Burn Rate Angel Investor Down Round 118

Steve Blank

MARCH 17, 2020

They have fewer cash reserves and less margin of error for managing sudden downturns. The questions every startup or small business CEO needs to ask now are: What’s my Burn Rate and Runway? Burn Rate and Runway. Subtract your monthly gross burn rate from your monthly revenue to get your net burn rate.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Up and Running

JULY 27, 2020

In fact, you can use your financial forecast to actively manage your business and improve your chances of success and growth. A key benefit of using your forecast as a management tool is that you’ll be able to significantly improve how you manage your cash and cash flow. Why is cash flow management important?

Forecast 83

Forecast Management Cash Position Software Review 83

Feld Thoughts

OCTOBER 5, 2022

Andy Dunn , who I only know indirectly, wrote an important book titled Burn Rate: Launching a Startup and Losing My Mind. While there might be other entrepreneur autobiographies like Burn Rate , I can’t think of any. It’s entirely manageable.

Burn Rate 153

Burn Rate Startup New York Restful 153

Up and Running

APRIL 22, 2020

If you lack an obvious history of responsible debt management, try to start building that up by applying for smaller lines of credit and assuring that you regularly pay it off. Cash flow management is important at any time, and basically provides a snapshot of the health of your business. Poor cash flow. Risky industry.

SBA 139

SBA Forecast Software Review Business Plan 139

Genuine VC

FEBRUARY 9, 2011

Employee count is the strongest (but not a perfect) proxy for management’s and investors’ outlook on the business. What is the burn rate and how much cash is in the bank now? a founding CEO stepping aside to make room for professional management could be an indicator of successful growth).

Startup 146

Startup Burn Rate Technical Review Down Round 146

YoungUpstarts

AUGUST 19, 2016

by Shawn Overcast , managing director at gothamCulture. While you absolutely need to keep an eye on earnings and burn rate, human capital is ultimately the fuel that makes the machine run. Shawn Overcast is managing director at gothamCulture. You have a million things to consider when investing your startup’s money.

Startup 100

Startup Burn Rate Cofounder Salary 100

Berkonomics

AUGUST 10, 2017

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

Silicon Valley 97

Silicon Valley Burn Rate Angel Investor Down Round 97

Steve Blank

NOVEMBER 18, 2010

For decades startups were managed by pretending the company would follow a predictable path (revenue plan, scale, etc.) As we described in previous posts , startups fail on the day they’re founded if they are organized and managed like they are a small version of a large company. Albert Einstein. That’s the definition of insanity.

Burn Rate 252

Burn Rate Management Business Model Customer Development 252

Hunter Walker

APRIL 17, 2022

Now, my salary doesn’t go to zero overnight because we’re still drawing down historical management fees but it’s all downhill from here as those income streams taper and end. Or at least it was the resulting impact of declining to take additional capital from our investors and commit our own dollars instead. Nice things are nice.

Burn Rate 141

Burn Rate Salary Early Stage .Net 141

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. Those advisors don’t make decisions for management.

Burn Rate 87

Burn Rate Hiring Engineer Entrepreneur 87

Up and Running

FEBRUARY 20, 2015

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. It’s important to track this metric so that you can manage your cash flow. What Is Cash Burn Rate?

Metrics 60

Metrics Burn Rate .Net Churn Rate 60

crowdSPRING Blog

OCTOBER 10, 2014

Refocusing the Startup Burn Rate Debate | OpenView Blog – crowdspring.co/1n8paLq. 44 engineering management lessons – crowdspring.co/1x7TVkf. Stock option questions startup employees should ask | Business Insider – crowdspring.co/1n8lUje. React – crowdspring.co/1yHa1WB. In-Residence – crowdspring.co/Zmo0kD.

Social Media 97

Social Media Small Business Design Media 97

Berkonomics

MARCH 30, 2010

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

Silicon Valley 85

Silicon Valley Burn Rate Angel Investor Down Round 85

Up and Running

APRIL 30, 2020

” It’s been a favorite management tool of mine since my time as VP for a market research firm, and it’s a method I used for decades growing a software company from zero to well over $10 million in annual sales. You have to have good numbers to optimize your management. How to conduct a scenario analysis.

Forecast 120

Forecast Balance Sheet Burn Rate Software Review 120