Both Sides of the Table

MAY 2, 2015

They can show the projections on what this does to burn rate. We hired Steve Pease to run finance and then eventually all operations and it has transformed how we operate. One area I’ve had much discussion with the companies in which I’ve invested in is bringing on board an operationally focused CFO.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Startup Professionals Musings

JUNE 9, 2012

Otherwise, sales, marketing, and operational costs will kill you. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. Cash flow is king.

Forecast 238

Forecast Burn Rate .Net Business Model 238

Startup Professionals Musings

JULY 15, 2013

Otherwise, sales, marketing, and operational costs will kill you. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. Cash flow is king.

Forecast 238

Forecast Business Plan Burn Rate .Net 238

Startup Professionals Musings

MARCH 22, 2011

Otherwise, sales, marketing, and operational costs will kill you. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. Cash flow is king.

Forecast 230

Forecast Burn Rate Startup .Net 230

Steve Blank

FEBRUARY 26, 2013

90 days later, I found out our games are terrible, no one is buying them, our best engineers started leaving, and with 120 people and a huge burn rate, we’re running out of money and about to crash. This can’t be happening to me. Stage 2: Deny any of it was your fault. We established a team of founders who worked collaboratively.

Redemption 225

Redemption Cofounder Silicon Valley Burn Rate 225

YoungUpstarts

MAY 19, 2016

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? To become part of the surviving half, use these methods to ensure your startup’s structure stands strong. Read your books from cover to cover.

Technical Review 124

Technical Review Burn Rate IP Intellectual Property 124

Feld Thoughts

NOVEMBER 18, 2013

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. A discussion around overall business viability, time to market, and capital impact would have ensued.

Burn Rate 153

Burn Rate Equity Software Review Early Stage 153

The Next Web

DECEMBER 2, 2013

But it’s a very challenging question to answer because what it would cost to build is a small number while operational costs are enormous.”. “If you asked me to build Facebook.com for you, I would quote you $500,000 and nine months of development and design time,” says Schippers. Others would say one million or a much bigger number.

Cost 168

Cost San Francisco New York City Ruby 168

Both Sides of the Table

AUGUST 9, 2011

Mostly we got to see the team operate in stressful times and that changed my perspective on the deal. Companies raised too much money in 2005-08 and had high burn rates. Businesses will continue to realize that the Internet is one big information utility and will continue to move operations to the cloud. Depressing.

Stock 305

Stock Technical Review Marketing Greece 305

Startup Professionals Musings

MARCH 25, 2010

Otherwise, sales, marketing, and operational costs will kill you. Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. Unless your volumes are in the millions or higher, the difference between manufacturing cost and customer price better be 50% or greater. Cash flow is king.

Forecast 151

Forecast Startup Burn Rate .Net 151

Steve Blank

MARCH 17, 2020

Here are a few thoughts about operating in uncertainty in a pandemic. 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.

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

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. Experienced founders: B2B.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

Up and Running

APRIL 22, 2020

If your business has only been operational for a few months you do have options. 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. Risky industry.

SBA 139

SBA Forecast Software Review Business Plan 139

Up and Running

FEBRUARY 20, 2015

Depending on the type of business you operate, the metrics you monitor will differ. For example, if you have an eCommerce website , you’ll want to measure unique visitors, referrals, bounce rate, and similar. What Is Operating Margin? Net profit is your operating income minus taxes and interest. What Is Cash Burn Rate?

Metrics 60

Metrics Burn Rate .Net Churn Rate 60

techcrunch.com

FEBRUARY 26, 2013

As an entrepreneur and operator at PayPal, LinkedIn, Slide, Square, and other places, and as a mentor to many startups over the years, Keith has earned the right to advise entrepreneurs. Most of us don’t know what we don’t know when operating in a new area. The right advisor asks the questions you never knew were important.

Burn Rate 87

Burn Rate Hiring Engineer Entrepreneur 87

Tim Keane

DECEMBER 14, 2009

  But because seed firms operate in an earlier phase, they need to offer different kinds of advice.    A low burn rate is a pearl of great price.    It provides lots of options that high burn rates take away.    A low burn rate is a pearl of great price. 

Burn Rate 60

Burn Rate Angel Groups Seed Stage Startup 60

Up and Running

APRIL 6, 2020

You need cash in the bank to operate, to pay employees, and to keep the doors open. 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.

Burn Rate 100

Burn Rate Forecast SBA Cash Position 100

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

Startup Professionals Musings

JULY 2, 2022

Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Operational. Once a business is operational, the opportunity can be maximized, and risk managed through best-of-breed processes, and a rules-based control model.

Burn Rate 382

Burn Rate Angel Investor Operations Demand 382

Startup Professionals Musings

FEBRUARY 5, 2021

As a rule of thumb, most viable businesses need a gross margin above 50 percent, even on wholesale prices, to cover operational expenses and survive as a business. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Forecast sales-volume expectations.

Forecast 369

Forecast Burn Rate Startup Widget 369

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. For each of these questions, and all the other important questions that come up in a time like this, you need to work with a scenario.

Forecast 120

Forecast Balance Sheet Burn Rate Software Review 120

VC Cafe

FEBRUARY 6, 2011

Massimo Sgrelli, Entrepreneur, angel investor, computer programmer, agrees with Eyal’s suggestion: The best way to attract Silicon Valley investors to your non-US startup is to split your operations keeping R&D in your own country, while moving business and marketing heads in the Valley (and potentially the founders too).

Silicon Valley 104

Silicon Valley Startup Seed Stage Delaware 104

Startup Professionals Musings

SEPTEMBER 30, 2019

Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Operational. Once a business is operational, the opportunity can be maximized, and risk managed through best-of-breed processes, and a rules-based control model.

Entrepreneur 267

Entrepreneur Burn Rate Angel Investor Operations 267

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. Further, we support this with weekly flash reports that focus on key operating metrics of the company.”. Entrepreneur Jeff Magnusson provides a sample agile budgeting workbook.

Agile 60

Agile Management Forecast Silicon Valley 60

Up and Running

JULY 27, 2020

Businesses operate on cash. With a system, your business will be better prepared to handle the ups and downs of cash flow and keep enough money in the bank to continue to operate healthily. As your business operates, you make sales and have expenses. Why is cash flow management important? How to manage cash flow.

Forecast 83

Forecast Management Cash Position Software Review 83

Startup Professionals Musings

OCTOBER 16, 2023

As a rule of thumb, most viable businesses need a gross margin above 50 percent, even on wholesale prices, to cover operational expenses and survive as a business. Project your cash burn rate to keep at least 18 months between venture capital or angel investments. Forecast sales-volume expectations.

Forecast 290

Forecast Burn Rate Widget Business Plan 290

Startup Professionals Musings

JUNE 18, 2012

Founders now routinely use their home to operate their startup until they are well into the revenue phase. That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. I now see and believe business plans that budget $1K for all this, versus a previous $20K or more.

Cost 255

Cost SEM Burn Rate Startup 255

Both Sides of the Table

MAY 23, 2010

You’ve kept a really low burn rate and paid yourself a very small salary. It’s legitimate to ask for cost cutting if you think the bridge won’t last long enough at the current burn rate. You might have legitimate concerns that warrant not funding the ongoing operations.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Startup Professionals Musings

JANUARY 17, 2014

Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Operational. Once a business is operational, the opportunity can be maximized, and risk managed through best-of-breed processes, and a rules-based control model.

Burn Rate 234

Burn Rate Angel Investor Entrepreneur Operations 234

Startup Professionals Musings

SEPTEMBER 29, 2018

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. Cash flow out equates to burn rate, and the runway depends on your reserves.

Burn Rate 223

Burn Rate Hockey Stick Startup Salary 223

Startup Professionals Musings

FEBRUARY 15, 2011

Founders now routinely use their home to operate their startup until they are well into the revenue phase. That’s a burn rate of at least $10K per month that can be eliminated if you are handy with computers and Quickbooks. I now see and believe business plans that budget $1K for all this, versus a previous $20K or more.

Entrepreneur 235

Entrepreneur SEM Burn Rate Social Network 235

Both Sides of the Table

JUNE 17, 2017

They don’t want high burn rates but they will never fund slow growth. million to fund operations in their first year of operations. After all, they doubled their operating costs when they weren’t even profitable. Should they have slowed down operating costs in order to “make a profit.” Again, it depends.

Stock Options 227

Stock Options Startup Dilution Venture Capital 227

Up and Running

SEPTEMBER 17, 2014

This is the rate at which a company uses up its capital to finance overhead before generating positive cash flow from operations. As a measurement of negative cash flow, the burn rate is what you need to compare all your forecasts to so you don’t run out of money prematurely, and by lowering operating costs appropriately

Metrics 146

Metrics Burn Rate Entrepreneur Forecast 146

Startup Professionals Musings

NOVEMBER 28, 2012

A variation on this theme is promising a burn rate to investors than you can’t deliver. Most startups I know have “refined” their target market and “pivoted” their operation several times during their rollout and growth phases. Do not delegate this task. Defining the strategy is a one-time process. So be alert and be flexible.

Entrepreneur 274

Entrepreneur Intellectual Property LLC Burn Rate 274

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. This metric helps determine how much cash you need for operation and expansion.

Founder 71

Founder Retention Metrics Technical Review 71

Startup Professionals Musings

JANUARY 7, 2014

A variation on this theme is promising a burn rate to investors than you can’t deliver. Most startups I know have “refined” their target market and “pivoted” their operation several times during their rollout and growth phases. Do not delegate this task. Assume defining the strategy is a one-time process.

Startup 265

Startup Intellectual Property LLC Burn Rate 265

Startup Professionals Musings

OCTOBER 22, 2017

Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Operational. Once a business is operational, the opportunity can be maximized, and risk managed through best-of-breed processes, and a rules-based control model.

Burn Rate 170

Burn Rate Angel Investor Operations Demand 170