Startup Professionals Musings

SEPTEMBER 14, 2016

Cash flow is a basic survival metric for every startup. 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. It doesn’t take a financial genius to recognize that you need to keep your burn rate low. You will make mistakes.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

VC Cafe

NOVEMBER 2, 2019

One question that keeps coming up when speaking with early stage entrepreneurs when it comes to funding, is what metrics the company needs to hit to raise seed/series A/B etc: What’s a good conversion rate? Is my churn rate below the category average? 500 Startups created a helpful primer on key B2C metrics.

B2C 141

B2C Technical Review Startup Retention 141

Up and Running

AUGUST 21, 2014

In this webinar, we take time to discuss the different metrics that startups—and established businesses—should be tracking. In terms of pre-purchase, traffic and content metrics. So I’m going to keep going here, “Pre-purchase, the traffic and content metrics.” Peter, anybody have any questions as I go along?

Metrics 84

Metrics Startup Churn Rate Forecast 84

Up and Running

FEBRUARY 20, 2015

If you don’t understand your key financial metrics, you have no way of monitoring your business’s health—and you risk mingling assets, incurring penalties for filing taxes late, overlooking expenses, and running into difficulties paying bills and employees, just to mention a few! Each article will give you: A brief definition of the metric.

Metrics 60

Metrics Burn Rate .Net Churn Rate 60

View from Seed

OCTOBER 24, 2019

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. Unlike in B2B, you don’t necessarily want to use a second-seed round to get to metrics that every investor will appreciate.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

Feld Thoughts

NOVEMBER 18, 2013

Three months in, the burn is now at $70k/month. No updates, screen comps, or metrics have been publicly shared yet. 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 152

Burn Rate Equity Software Review Early Stage 152

YoungUpstarts

JULY 31, 2019

Instead of looking at traditional metrics such as EBITA (earnings before interest taxes and amortization) and MRR (monthly recurring revenue), early investors are compelled by intangibles such as charismatic leadership, a loyal team, exciting IP, an important name on an executive board, news coverage, etc.

Cofounder 127

Cofounder Burn Rate Technical Cofounder Seed Capital 127

crowdSPRING Blog

OCTOBER 24, 2014

Benchmarking SaaS Startup Efficiency with Revenue per Employee Metrics | by @ttunguz – crowdspring.co/1sRVdjm. What is the Right Burn Rate at a Startup Company? | How to Ruin Your Company with One Bad Process | by @bhorowitz – crowdspring.co/11FYS9R. by @msuster – crowdspring.co/1qKWc0z. 1wkmIU1.

Social Media 95

Social Media Small Business Design Media 95

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 are the new financial metrics? How do you know?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

Both Sides of the Table

MAY 2, 2015

They can show the projections on what this does to burn rate. The full financial details and metrics were in the deck. So my time was freed up to call board members in advance and walk them through our metrics and understand any concerns. Establishing Metrics & Monitoring Success (or Failures). HR & Legal.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Startup Lessons Learned

MARCH 27, 2009

The full formula works like this: runway = cash on hand / burn rate # iterations = runway / speed of each iteration Very few successful companies ended up in the same exact business that the founders thought theyd be in (see Founders at Work for dozens of examples). Were talking PayPal -sized variations.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117

Both Sides of the Table

JULY 16, 2013

The minute you try to monetize now they have metrics with which to beat you up and say you’re business has limitations.” The company with no revenue and a $150k burn rate that raised $2.5 In this situation I think we should be increasing burn rate and not immediately focusing on revenue [I do sometimes believe this].

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

Steve Blank

FEBRUARY 22, 2010

Do the metrics show that the business model you’re creating will support the company you’re trying to become? Startup Metrics. Startups need different metrics than large companies. Web Metrics. If you have venture investors, work with them to agree what metrics matter. Financials. Contribution Margin.

Balance Sheet 307

Balance Sheet Startup Burn Rate Metrics 307

David Teten

NOVEMBER 26, 2019

Instead of budget approvals, monitor key metrics and give managers more flexibility. Sean Colrock, Director of Client Partnerships at Wiss & Company , suggests at a minimum you track: cash on hand; fume date; and burn rate. Traditional budgets can be destructive and a huge waste of time.

Agile 60

Agile Management Forecast Silicon Valley 60

Startup Lessons Learned

MARCH 13, 2009

And even worse, wed cranked up the burn rate in order to be ready to handle all those millions of mainstream customers we anticipated. Know what the success metrics are for the launch. Worse, we tricked ourselves into thinking that what the press said about our success was actually true.

San Francisco 168

San Francisco PR Lean Early Stage 168

Up and Running

SEPTEMBER 17, 2014

That’s why we asked nine members from Young Entrepreneur Council (YEC) what metrics all founders should be aware of — always. No Specific Metric. For me, there is not one metric that is more important than another — you should be up to speed with every aspect. – Matthew Moisan , Moisan Legal, P.C.

Metrics 146

Metrics Burn Rate Entrepreneur Forecast 146

Steve Blank

JUNE 1, 2011

The Wrong Metrics. Traditional startup board meetings spend an insane amount of wasted time using Fortune 100 company metrics like income statements, cash flow, balance sheet, waterfall charts. The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance.

Silicon Valley 300

Silicon Valley Business Model Venture Capital Balance Sheet 300

Up and Running

OCTOBER 7, 2019

You need to use your time and resources productively by focusing on the right metrics so you can use data to help you implement improvements that matter. The first step is to formulate a KPI strategy by selecting the right metrics to track. The metrics should help you identify areas for improvement.

Founder 71

Founder Retention Metrics Technical Review 71

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. A seed-stage mobile startup’s housekeeping section might look something like this: Section 3: Core Metrics.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Steve Blank

JUNE 1, 2011

The Wrong Metrics. Traditional startup board meetings spend an insane amount of wasted time using Fortune 100 company metrics like income statements, cash flow, balance sheet, waterfall charts. The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance.

Silicon Valley 273

Silicon Valley Business Model Venture Capital Balance Sheet 273

Startup Professionals Musings

JULY 4, 2021

Productive processes start with a plan, and end with metrics that measure value delivered. As an entrepreneur, you need a visible business plan and weekly team meetings, so everyone is working on current issues and real goals. Poor or too many business processes. Business processes can be your biggest time saver, or your biggest waste.

Startup 404

Startup Lean Metrics Matching 404

Up and Running

JUNE 18, 2013

We’ll be using LivePlan to display these metrics. Keep an eye on both your monthly burn rate and any major payables to make sure you’re financially viable in the immediate future. Looking at your burn rate again (monthly ongoing expenses), project forward to see how much runway you have until you run out of cash.

Metrics 79

Metrics Burn Rate .Net Finance 79

VC Cafe

JUNE 6, 2024

It’s not a surprise, given that entrepreneurs are obsessed with data and metrics, but in the conservative VC market of 2024, it feels even more important for founders to know what ‘good’ looks like and what investors expect. Metric Unremarkable Good Excellent Outlier ARR <$500k $500k-$1.5m $1.5m-$2.5m >$2.5m

B2B 97

B2B Burn Rate Generative AI Retention 97

VC Adventure

MARCH 17, 2022

With the markets down significantly, financings (at least at the later stages) slowing down, and inflation and interest rates on the rise, perhaps now is a good time to talk about your burn rate. Your underlying business metrics should.

Balance Sheet 93

Balance Sheet Burn Rate Metrics Valuation 93

Both Sides of the Table

AUGUST 25, 2015

private companies grow so quickly that their metrics catch up with their valuations. keep your burn rate under control relative to your balance sheet (ie how much cash you have) and your income statement (how much cash you’re burning). public stocks go up and privates can grow into IPOs; or. start raising early.

Balance Sheet 150

Balance Sheet Valuation Burn Rate Stock 150

BeyondVC

DECEMBER 10, 2009

Given my experience with SAAS based companies like GoToMyPC (Citrix Online now) and LivePerson (Nasdaq: LPSN), we also spent some time discussing key financial metrics for SAAS businesses that he should pay attention to as he ramped up his business.

Churn Rate 112

Churn Rate Burn Rate Startup Metrics 112

Startup Professionals Musings

AUGUST 14, 2015

Define metrics to keep on track for the journey. Common financial metrics include burn rate, gross margin, revenue growth and net profit. This means delegating tasks and not micro-managing, as well as more time spent working on the business, rather than in the business.

Elevator Pitch 120

Elevator Pitch Burn Rate Startup Metrics 120

ReadWriteStart

JULY 9, 2023

Metrics A business should be measurable. Metrics help you identify if you are on the right path and they help to convince prospective investors to give you money. There are more than a dozen startup metrics that a founder can use. Learn how others do it, listen to experts, and figure out your pricing policy.

Intellectual Property 122

Intellectual Property Startup Burn Rate Metrics 122

The Startup Magazine

MAY 9, 2024

However, the pursuit of expanding their ideal customer profile (ICP) into uncharted territories where they had previously seen little to no success revealed the unsustainable nature of their growth and the misleading success metrics it generated. The end goal is delivering real value and building trust.

Burn Rate 88

Burn Rate Startup Bankruptcy Metrics 88

ReadWriteStart

JUNE 13, 2011

The Wrong Metrics : Traditional startup board meetings spend an insane amount of wasted time using Fortune 100 company metrics like income statements, cash flow, balance sheet, waterfall charts. The only numbers in those documents that are important in the first year of a startup's life are burn rate and cash balance.

Silicon Valley 117

Silicon Valley Balance Sheet Metrics Early Stage 117

Startup Professionals Musings

AUGUST 7, 2015

Of course, these should never be in a customer pitch, but investors expect an overall strategy with specific budgets, milestones and metrics. This allows them to calculate burn rates, break-even points and forecast the company valuation over time. Specific elements of your marketing and sales plans.

Product 120

Product Intellectual Property Liquidity Event Burn Rate 120

abovethecrowd.com

APRIL 20, 2016

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. Layoffs have also become more prevalent.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

David Cohen

MARCH 1, 2017

As an investor, I’m often asked what sort of burn rate is appropriate for a growing company. For SaaS companies in this situation, my rule of thumb for burn guidance is to have a one year ratio of net burn to net new MRR. Your $30K of net new MRR pays back this months burn over the next year.

.Net 94

.Net Burn Rate Cloud Metrics 94

Professor VC

JANUARY 27, 2008

Perhaps, this is partially driving some of the jumping across the table, but certainly the performance metrics of funds and individual partners has also played a key role. Can Entrepreneurship Be Taught? ► October. (1). Watch Out for the Red W(h)ine. ► September. (1). Survey says VC's invest on Gut Instinct. ► July. (1).

San Jose 28

San Jose Technical Review Angel Investor Venture Capital 28

Professor VC

FEBRUARY 26, 2008

Its Ok to Exit a Little Early -StubHub was experiencing great growth and hitting its metrics when Ebay acquired the company in early 2007 It is quite possible that Jeff could have gotten a higher price for the company by waiting, but felt there were a number of benefits to exiting when they did. Can Entrepreneurship Be Taught? ► July.

Technical Review 28

Technical Review San Jose Angel Investor Silicon Valley 28

Feld Thoughts

SEPTEMBER 9, 2015

Some will demonstrate strategically justifiable metrics and have fantastic ‘up round’ exits; others may see liquidation preferences kick in which will negatively impact founders and employees; others may fulfill the adage “IPO is the new down round” , which has been the case for more than half of the public companies on our list.

Liquidation Preference 70

Liquidation Preference Burn Rate Balance Sheet .Net 70

BeyondVC

DECEMBER 9, 2009

Given my experience with SAAS based companies like GoToMyPC (Citrix Online now) and LivePerson (Nasdaq: LPSN), we also spent some time discussing key financial metrics for SAAS businesses that he should pay attention to as he ramped up his business.    Another area that is quite important is churn rate. 

Churn Rate 78

Churn Rate Burn Rate Startup Metrics 78