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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. Startup Lessons'

Burn Rate 383
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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

That said, nothing is cost-free. More complex cost of capital calculation. This causes the cost of capital for Flexible VC, often calculated through IRR (similar to an interest rate), can be higher than that of venture debt or traditional RBI. Typically promissory note or non-voting common stock, with covenants.

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How should I finance my new venture? - Startups and angels: Along.

Tim Keane

The overarching idea, of course, is to reduce the cost of capital while maintaining appropriate flexibility for the venture.  2]   Aligning interests in structure: cost and risk.   Appropriate covenants.   About the same cost as #2 but more flexible if repayment terms slip a bit. Possibilities: 1. 

Finance 83
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Who are the Major Revenue-Based Investing VCs?

David Teten

Repaid 12-36 months with ability to prepay at reduced cost. Like other RBI firms, Decathlon does not require warrants, governance involvement, or the types of financial covenants that are often associated with other venture debt type solutions. Capital need of up to $1.5M over next 12 months. Facility sizes of 2-5x MRR .

Revenue 60
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10 Things the Bank Will Ask When You Need a Business Loan

Up and Running

One exception to the rule is that the federal Small Business Administration (SBA) has programs that guarantee some portion of startup costs for new businesses so banks can lend them money with the government, reducing the banks’ risk. As I explained above, banks do lend money to startups. Agreement on future ratios.

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Several more real costs of taking outsider investments.

Berkonomics

The combination of restrictive covenants in the investor documents and the new dynamic of board members with an agenda make for a change in the culture of the corporation, certainly one for the CEO.

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Assessing The State Of And Options For Your Business During COVID-19 Fallout

YoungUpstarts

Following from that, is there an operational plan that can be implemented to lower costs while salvaging the competitive advantage of the company? This means: compiling a balance sheet, listing all of your assets, all of your payables (or “liabilities”), including what may become a liability down the road (i.e.,