Steve Blank

NOVEMBER 2, 2009

And I can even imagine cases where it might burn more cash than a traditional startup. The key contributors to an out-of-control burn rate is 1) hiring a sales force too early, 2) turning on the demand creation activities too early, 3) developing something other than the minimum feature set for first customer ship. Lets see why.

Lean 263

Lean Silicon Valley Startup RSS 263

Startup Professionals Musings

NOVEMBER 7, 2016

Compensation and support carried the corporate burden rate. The burn rate was extremely high, with no one working for equity or deferred compensation. In enterprises, performance objectives are usually tied to internal processes, rather than beating competitors, customer acquisition, and revenue growth.

Technical Review 214

Technical Review Entrepreneur Silicon Valley Burn Rate 214

Steve Blank

FEBRUARY 25, 2010

The next step in the Customer Development process is Customer Validation – making sure that there really is a repeatable and scalable revenue and business model before you turn up your cash burn rate.

Customer Development 274

Customer Development Web Developer Customer 274

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? Look for examples of similar companies and revenue multiples achieved from acquirers.

Sweat Equity 207

Sweat Equity Burn Rate Technical Review Intellectual Property 207

Startup Professionals Musings

JUNE 9, 2012

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. The holy grail is break-even, when revenues first catch up with the outflow. Then there are computer costs, trade shows, inventory, and a thousand other things. Cash flow is king. Financial projections can be intimidating.

Forecast 238

Forecast Burn Rate .Net Business Model 238

Startup Professionals Musings

JULY 15, 2013

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. The holy grail is break-even, when revenues first catch up with the outflow. Then there are computer costs, trade shows, inventory, and a thousand other things. Cash flow is king. Financial projections can be intimidating.

Forecast 238

Forecast Business Plan Burn Rate .Net 238

Startup Professionals Musings

MARCH 22, 2011

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. The holy grail is break-even, when revenues first catch up with the outflow. Then there are computer costs, trade shows, inventory, and a thousand other things. Cash flow is king. Financial projections can be intimidating.

Forecast 230

Forecast Burn Rate Startup .Net 230

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. Gross burn is your cost base and net burn is the difference between your revenue and costs. In short, it’s the amount of cash you’re burning every month (vs.

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. If the tool doesn’t grow his revenue then how is he going to cover the additional costs – especially in this market?&#. We were SMOKING cash.

Entrepreneur 306

Entrepreneur Burn Rate Cofounder Sales 306

Both Sides of the Table

FEBRUARY 8, 2016

The startup industry may be “resetting,” which doesn’t mean a “crash” but rather just a resetting of valuations, timescales, winners/losers, capital sources and the relative emphasis of growth rates vs. burn rates.

Burn Rate 150

Burn Rate Cap Table Startup Dilution 150

Feld Thoughts

SEPTEMBER 16, 2011

Since SayAhh is in the pre-launch development stage, the company doesn’t have any revenue yet. This results in a gross margin of $0, where gross margin is revenue – cost of goods sold. The default Quickbooks setup uses “Income” to refer to “Revenue”.

Balance Sheet 129

Balance Sheet Fractional CTO Burn Rate Salary 129

VC Cafe

NOVEMBER 2, 2019

In SaaS the main benchmarks being measured are revenue growth, sales efficiency (unit economics), churn and burn rate. Example of Baremetrics revenue per user benchmarks. Part of the challenge in deep tech is getting to revenue and scaling it. Software as a Service (Saas) benchmarks. Consumer apps and services.

B2C 141

B2C Technical Review Startup Retention 141

The Next Web

JANUARY 22, 2014

Age (young founders are more likely to be able to pay themselves low salaries), company revenue (not just funding raised) and team size were flagged as potential influences on why a founder may pay him- or herself a particular amount. Startup revenue and founder salary. Founder age and salary.

Salary 152

Salary Founder Entrepreneur Burn Rate 152

Startup Professionals Musings

MARCH 25, 2010

Your “burn rate” or net cash flow out is usually the single most important survival parameter to a startup. The holy grail is break-even, when revenues first catch up with the outflow. Then there are computer costs, trade shows, inventory, and a thousand other things. Cash flow is king. Financial projections can be intimidating.

Forecast 151

Forecast Startup Burn Rate .Net 151

YoungUpstarts

MAY 19, 2016

by Gadiel Morantes , chief revenue officer at Early Growth Financial Services. 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? A Jenga tower is a precariously built one.

Technical Review 124

Technical Review Burn Rate IP Intellectual Property 124

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? Look for examples of similar companies and revenue multiples achieved from acquirers.

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? Look for examples of similar companies and revenue multiples achieved from acquirers.

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

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

Both Sides of the Table

AUGUST 9, 2011

Companies with less than $2 million in revenue were asking for $50-60 million valuations and getting them. Companies raised too much money in 2005-08 and had high burn rates. When I first got into the industry it was 2007. Valuations were enormous relative to progress in companies. was still a term being bandied about.

Stock 305

Stock Technical Review Marketing Greece 305

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. 1qKWc0z.

Social Media 95

Social Media Small Business Design Media 95

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.

Dilution 149

Dilution B2B Burn Rate Early Stage 149

Up and Running

APRIL 22, 2020

This does not mean that you need 2-3 years’ worth of documents showcasing your revenue and cost of goods sold, but you’ll likely need reports that show at least 12-months of financial activity. Many startups are small, local businesses with hopes of eventually rapidly scaling—but they’re still establishing a track record.

SBA 139

SBA Forecast Software Review Business Plan 139

Both Sides of the Table

JULY 16, 2013

The company with no revenue and a $150k burn rate that raised $2.5 I often wonder why they didn’t find a way to bring in some revenue to cover costs. Newsflash – if you had $75k revenue / month you’d have 8 months cash left in stead of 4. I see this weekly. million and has 4 months cash left.

Burn Rate 412

Burn Rate Dilution Revenue Valuation 412

crowdSPRING Blog

OCTOBER 10, 2014

Refocusing the Startup Burn Rate Debate | OpenView Blog – crowdspring.co/1n8paLq. 5 Things I Learned Analyzing Buffer’s Revenue Dashboard | Ivan Kreimer – crowdspring.co/1xfTwMG. Stock option questions startup employees should ask | Business Insider – crowdspring.co/1n8lUje. React – crowdspring.co/1yHa1WB.

Social Media 97

Social Media Small Business Design Media 97

Up and Running

FEBRUARY 20, 2015

If you’re running a subscription business , you’ll want to track churn rate, monthly recurring revenue, lifetime value, and so on. 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.

Metrics 60

Metrics Burn Rate .Net Churn Rate 60

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

FEBRUARY 5, 2021

Yet every business requires revenue and volumes, as certainly as it requires a product to sell. Doubling revenue each year is a good target. You need 5 percent or more of revenue for marketing, maybe more for ongoing development, and people costs will double as you add benefits, insurance, training, IT and new processes.

Forecast 369

Forecast Burn Rate Startup Widget 369

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

Transformify

AUGUST 27, 2017

Their investors may push them into that direction too, as the high burn rate is often seen as a prerequisite for high growth. You don’t have the right people on board, you are burning cash and the work is not done, at its worst, your product is already live and you are losing clients due to software bugs and poor user experience.

Hiring 64

Hiring Software Review Burn Rate Startup 64

Startup Professionals Musings

FEBRUARY 17, 2021

With a little help from a friend, you can handle expenses, revenue, and payroll, with QuickBooks or a similar package. These steps alone can reduce your monthly burn rate by at least $10K. You can now skip the mandatory office space rental, with secretary and bookkeeping staff, or outsourcing.

Cost 405

Cost Entrepreneur Burn Rate Social Media 405

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). The key is to be able to refute as many major hypotheses as you can.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117

Steve Blank

NOVEMBER 18, 2010

For decades startups were managed by pretending the company would follow a predictable path (revenue plan, scale, etc.) The Revenue Plan – The Third Fatal Assumption. Notice that the traditional product introduction model leads to a product launch and the execution of a revenue plan. Albert Einstein. Ritualized Crises.

Burn Rate 252

Burn Rate Management Business Model Customer Development 252

Startup Professionals Musings

JULY 2, 2022

Then you walk the delicate balance between burn rates, revenue flows versus expenses, investment in marketing, and employees. Both risks and opportunities in this area can arise from many aspects of your startup, before and after product development. Operational.

Burn Rate 382

Burn Rate Angel Investor Operations Demand 382

This is going to be BIG.

MARCH 1, 2010

If they *all* turn you down, then I strongly advocate that you either try to get revenues to prove them wrong, bootstrap user traction, spend your own cash, go with friends/family, or maybe, just maybe, take another look at your model. That being said, is low burn rate really what you should be optimizing for?

New York City 114

New York City New York Startup Burn Rate 114

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. You can revisit the analysis at any time and make adjustments based on your updated budgets and revenue numbers, as well as the changing economic landscape.

Forecast 120

Forecast Balance Sheet Burn Rate Software Review 120

Startup Professionals Musings

OCTOBER 16, 2023

Yet every business requires revenue and volumes, as certainly as it requires a product to sell. Doubling revenue each year is a good target. You need 5 percent or more of revenue for marketing, maybe more for ongoing development, and people costs will double as you add benefits, insurance, training, IT and new processes.

Forecast 290

Forecast Burn Rate Widget Bootstrapping 290

YoungUpstarts

MAY 12, 2020

Analyze your ongoing burn-rate in both normal scenarios and ‘bear-bones’ scenarios. Consider where you can optimize your burn rate. If you’re able to capitalize on this now, then when quarantine lifts you may have an entirely new revenue stream to leverage or a whole new business pathway.

Burn Rate 264

Burn Rate Bandwidth Lean Business Model 264