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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs. In startup world low GM almost always equals death which is why many Internet retailers have failed or are failing (many operated at 35% gross margins).

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A Guide to Using Authority & Social Proof in Fund Raising

Both Sides of the Table

. “Yes&# was given to me by one of my favorite angel investor / seed VC’s to work with – John Greathouse of Rincon Venture Partners and author of the blog InfoChachkie that you should check out because it is filled with great info from a guy who has been a very successful operator.

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Seed Stage Startups Are Now Graded on a Curve

View from Seed

Effective) post-money valuation. Similarly, the capital-efficiency to date is taken as reflective of inherent in the business itself and operating mindset of the team, rather than as the amount of capital used for discovery of product-market fit that is decoupled from the efficiency post-traction.

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Why Entrepreneurs Should Be Generous With Investors

YoungUpstarts

As well as how to work with pre and post-money valuations. You’re going to be asking your investors for a lot of generosity in their patience, more money, introductions, and all types of daily operational help. This instantly puts founders on guard, in a defensive position. Generosity is nowhere on their radar.

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Cliff Notes S-1: Kayak ? AGILEVC

Agile VC

2010 Operating Income: $16 million. Post-money valuation probably no higher than $12M (2). Gross Margin: 94% –> i.e. for every $1 of revenue Kayak only spends $0.06 paying for travel data from ITA or others (customers acquisition spend is not included in COGS). 2010 Net Income: $8 million. Series A-1 Preferred.

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90 Things I've Learned From Founding 4 Technology Companies

betashop.com

At Fab, our virtual product is our website & apps, our physical products are the merchandise we sell, and our experience product is our operations and service. Do they operate in silos or do they foster teamwork and collaboration? 10M post-money valuation = $100M target. 500M valuation = $5B target.

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So What is The Right Level of Burn Rate for a Startup These Days?

Both Sides of the Table

People who think of fund raising as a “distraction away from the core business” fundamentally don’t understand that running a business comprises of: Shipping products, selling to & servicing customers, marketing, HR, recruiting, financial reporting AND making sure you have enough money to support operations.

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