Steve Blank

SEPTEMBER 5, 2018

A version of this article first appeared in the Harvard Business Review. Tech IPO prices exploded and subsequent trading prices rose to dizzying heights as the stock prices became disconnected from the traditional metrics of revenue and profits. Then the cycle repeats with a new set of technologies. Then one day it was over.

Lean 335

Lean Burn Rate Startup IPO 335

Startup Professionals Musings

NOVEMBER 7, 2014

They can iterate and evolve their business idea with a low burn rate and minimal dependencies. Although the major crowd funding sites today, including Kickstarter and Indiegogo , don’t technically require a business plan, they do demand essentially the same information in a project format.

Business Plan 274

Business Plan Technical Review Angel Investor Due Diligence 274

Startup Professionals Musings

FEBRUARY 18, 2023

Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology. Early stage burn rates over $50K per month, or a runway of less than six months may indicate an inefficient or desperate startup.

Sweat Equity 207

Sweat Equity Burn Rate Technical Review Intellectual Property 207

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

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. link] [link] I guess you could call it the “Continuous Wave Radio&# technology period.

Silicon Valley 302

Silicon Valley RSS San Francisco Technical Review 302

YoungUpstarts

MAY 19, 2016

Think of a tech startup the same way. Forty-six percent of those cases fall short due to issues of “incompetence,” which can allude to any type of structural snafu. Use burn rate as an example. Be diligent about income and expenses and how each relates to your milestones. A Jenga tower is a precariously built one.

Technical Review 124

Technical Review Burn Rate IP Intellectual Property 124

Both Sides of the Table

OCTOBER 12, 2010

This is probably because many founders are product or technology people. 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. If this is you I think it’s really important to get over this hurdle.

Hiring 346

Hiring Sales Startup Early Stage 346

Both Sides of the Table

MAY 28, 2018

Founder: “$8–10 million” VC: “What’s your current burn rate?” VC: “So at a constant rate of burn rate you’d be raising enough for 2.5–3 I built a “plan b,” which in this case just holds burn rate constant at $350k and has you out of cash in month 19, which gives you more runway. Founder: “Um.

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Startup Professionals Musings

APRIL 8, 2015

Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology. Early stage burn rates over $50K per month, or a runway of less than six months may indicate an inefficient or desperate startup.

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

VC Cafe

NOVEMBER 2, 2019

When you start with an honest and diligent effort to determine the truth of your situation, the right decisions often become self-evident.” — Jim Collins , author of Good to Great. In this post I’ll focus on benchmarking resources for seed and series A in the following three categories: SaaS B2C / Consumer apps Deep tech.

B2C 141

B2C Technical Review Startup Retention 141

Both Sides of the Table

FEBRUARY 8, 2016

Much has changed in the past four months of the technology startup world and how outsiders value the business. Investors are rewarding cautious growth more than high-burn-rate growth at all except the most successful of companies (and even there it may eventually change).

Burn Rate 150

Burn Rate Cap Table Startup Dilution 150

Startup Professionals Musings

APRIL 10, 2016

Every startup founder loves to prompt for questions from investors and potential key team members about their vision, and the huge opportunity that can be had with their disruptive technology. Early stage burn rates over $50K per month, or a runway of less than six months may indicate an inefficient or desperate startup.

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Startup Professionals Musings

OCTOBER 18, 2015

Typically you can browse them by region or technology to find founders. Every geographic area has entrepreneur networking activities, such as startup weekends and tech meetups. Once you find a startup that seems like a good fit, it’s still important to do some of your own due diligence. Kick your networking up a notch.

Technical Review 120

Technical Review Entrepreneur Stock Options Silicon Valley 120

Feld Thoughts

NOVEMBER 18, 2013

One of them used to be a lead developer at [insert hot consumer tech company here]. Had the company created a board and run it properly, they would have ratified a budget, reviewed compensation plans, and agreed on spending levels during early product development. In startup time, that feels like forever.

Burn Rate 153

Burn Rate Equity Software Review Early Stage 153

Professor VC

JANUARY 27, 2011

How Much Diligence is Due.Or Ive addressed the due diligence question in previous posts, but this came up again in a debate we were having at a recent meeting of the Sand Hill Angels. And in order to increase our groups returns, one of our goals should be to get more people and man hours involved in the diligence process.

Technical Review 31

Technical Review Due Diligence Silicon Valley San Jose 31

Steve Blank

SEPTEMBER 7, 2009

The new VP of Sales reviews the sales strategy and tactics that did not work and comes up with a new sales plan. O problema é que, devido à grande estrutura criada por antecipação e o consequente nível das despesas (burn rate), a Startup fica com pouco tempo e agilidade para iterar e descobrir o que estava de errado no plano.

Customer Development 233

Customer Development Developer Customer Silicon Valley 233

The Next Web

JANUARY 22, 2014

This would indicate that founders are generally being sensible with their bank balance, watching their burn rate closely and not taking more out until there’s more coming in. Average salary peaks for founders aged 41 to 50, perhaps due to that often being an age at which family life can be at its most expensive.

Salary 152

Salary Founder Entrepreneur Burn Rate 152

Genuine VC

FEBRUARY 9, 2011

Venture capitalists have an information advantage – startups are required to be fully transparent about everything before a VC invests in it during weeks if not months of diligence, but prospective employees are limited to just a few questions they ask during a series of interviews with only a few people at the company.

Startup 146

Startup Burn Rate Technical Review Down Round 146

crowdSPRING Blog

SEPTEMBER 19, 2014

Inside the Mind of a Technical Founder | OpenView Blog by Larry Kim – crowdspring.co/1u7Fz1b. Are startup burn rates out of control? Livescribe Notebooks by Moleskine marry analog and digital technology – crowdspring.co/1lYTFTX. The Myth of Venture Capital | Re/code by Jon Oringer – crowdspring.co/1tNFeV7.

Social Media 94

Social Media Small Business Design Media 94

Tim Keane

DECEMBER 14, 2009

  When this happens, (due in part to the need to keep fees low) things get both left out and included that later wisdom will suggest should've been included or left out.    That advice is often both technical and srtructural.    A low burn rate is a pearl of great price. 

Burn Rate 60

Burn Rate Angel Groups Seed Stage Startup 60

Mucker Lab

MAY 28, 2020

Compass.co, a benchmarking and research service, analyzed 3,200 internet startups and found that 74 percent “fail due to premature scaling.” The anxiety is growing so intense that CB Insights is now charging $6,895 for its own “List of Early-Stage Tech Startups Running Out of Cash (Dying).” Move quickly but spend sensibly.

Startup 78

Startup Cofounder Burn Rate Technical Review 78

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

www.paulgraham.com

APRIL 28, 2010

I wassurprised recently when I realized that all the worst problems wefaced in our startup were due not to competitors, but investors.Dealing with competitors was easy by comparison. Angels whove made money in technology are preferable,for two reasons: they understand your situation, and theyre asource of contacts and advice.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

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. Good boards know the difference, and they know what’s important when.

Burn Rate 87

Burn Rate Hiring Engineer Entrepreneur 87

VC Cafe

FEBRUARY 6, 2011

R&D outside SV is normally cheaper, so it helps you keeping your burn rate low. How do you review documents in non-english languages, where structures can be quite different from what we are used to in the US? Start with a short (a few weeks) trip to SV and attend all the tech events there. Network and talk to people.

Silicon Valley 104

Silicon Valley Startup Seed Stage Delaware 104

www.chubbybrain.com

SEPTEMBER 28, 2011

Also worth a read after you review these startup failure post-mortems. A month ago, half way through my angel funds raised from family members, I decided to review the progress I’ve made and figure out what still needs to happen to make this a viable business. We focused too much on technology. Company : Nouncer. Too much money.

Software Review 79

Software Review Startup Technical Review Vesting 79

philipsmith.typepad.com

SEPTEMBER 24, 2011

Compensation-wise the biggest challenge is insuring people are respectful of my time and skills (when they don't write real checks for hourly or project work they don't tend to be quite as diligent on this as one would like!). The G&A Function in Early Stage Tech , The Startup Environment | Permalink. Tech Business Environment.

Silicon Valley 40

Silicon Valley Equity Technical Review Recapitalization 40

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. due to inflation, salary increases) to maintain margin in an environment of downward pressure on prices. Successful agile budgeting requires modern technology.

Agile 60

Agile Management Forecast Silicon Valley 60

Professor VC

SEPTEMBER 26, 2011

Dan Frommer, in Moneyball for tech startups , interviewed Fred Wilson, Chris Dixon, Paul Graham and Ben Horowitz on the topic. And given that four of the most important tech investors in the world seem skeptical of it, if someone can figure out a good formula that works, they may be able to exploit it". How Much Diligence is Due.

Technical Review 38

Technical Review Early Stage San Jose Angel Investor 38

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.

Founder 71

Founder Retention Metrics Technical Review 71

abovethecrowd.com

FEBRUARY 24, 2015

Every successful technology company raises money throughout its lifecycle, perhaps starting with a seed investment and progressing through Series A, B, C, late-stage investments, and, for the most successful companies, an IPO. These large, high-priced private financings are the defining characteristic of this particular technology cycle.

IPO 40

IPO Liquidation Preference Valuation Technical Review 40

K9 Ventures

NOVEMBER 2, 2015

For context, I am talking mostly to Computer Science and Engineering grads from the top schools who are looking at opportunities at tech companies. It is almost always going to be sent, received, and reviewed electronically. This post may not apply to students graduating from other disciplines or schools as directly, i.e. YMMV.). #3:

Technical Review 48

Technical Review Venture Capital Michigan Burn Rate 48

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. In Q1 of 2016 there were zero VC-backed technology IPOs.

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Professor VC

FEBRUARY 26, 2008

He was the first American in 30 years to graduate from the 5-year brewing program at the Technical University of Munich , the highest technical degree in brewing engineering. How Much Diligence is Due. Why I Hate Convertible Debt.Let Me Count the Way. ► February. (1). A Lot of Horn Tooting over a Kazoo sized deal.

Technical Review 28

Technical Review San Jose Angel Investor Silicon Valley 28

Professor VC

APRIL 7, 2011

Technically, the start-up is insolvent from the day they take the first dollar of investment. How Much Diligence is Due. Ive seen a number of entrepreneurs, angels and VCs fall into the trap of providing debt in small pieces. Why Invest in an insolvent company? Why I Hate Convertible Debt.Let Me Count the Way. ► January.

San Jose 36

San Jose Technical Review Angel Investor Valuation 36

Professor VC

FEBRUARY 12, 2008

Of course, rigorous diligence is performed, the team is challenged, and assumptions are tested. This is especially true of purchases such as buying a new home, which is one of the most common triggers for buyer's remorse, due in no small part to the huge amounts of money usually involved.Thanks for sharing this nice post.

San Jose 31

San Jose Technical Review Venture Capital Angel Investor 31

Professor VC

JANUARY 27, 2008

During the next four months, we will examine over a dozen entrepreneurial ventures from a diverse mix of industries - technology, service, food & beverage, and fashion. After a successful career in a technology leader (Intel, Microsoft, Cisco, etc.) How Much Diligence is Due. ► February. (1). ► January. (1).

San Jose 28

San Jose Technical Review Angel Investor Venture Capital 28