3 ms·

Does anyone have an estimate on the average burn rate for a startup in San Francisco? Seems important these days, given talk of the end of easy money (see @bgur

Does anyone have an estimate on the average burn rate for a startup in San Francisco? Seems important these days, given talk of the end of easy money (see @bgurley)

presty 11y ago
https://medium.com/@DanielleMorrill/is-my-startup-burn-rate-normal-882b2bd20f02 https://medium.com/@DanielleMorrill/is-my-startup-burn-rate-...
- 7Figures2Commas 11y ago
  This company's burn rate is over $400,000 now according to http://mattermark.com/how-we-spend-money-at-mattermark/ http://mattermark.com/how-we-spend-money-at-mattermark/.
- btown 11y ago
  It's abnormally risky to raise only enough money for 17 months of runway. I wish Mattermark the best, but this level of burn is not the most confidence inspiring.
  - dmor 11y ago
    From what we understand from investors, it is actually pretty typical to raise enough money for 18 months of runway. Additionally, we still had ~1.5m in the bank when we raised. I will certainly report back on how it goes though!
lsc 11y ago
I would think that the end of easy money would have a huge effect on the prices of things that startups buy. In other words, if @bgurley is right and the economics of money-losing companies have changed significantly, then historical burn rate numbers (from 'easy money' times) are not going to be particularly useful to you.
- webmasterraj 11y ago
  Cutting burn rate is notoriously hard to do. Startups are built on dreams, and every single one of them has a longer list of things it wants to do than the capability to do them. Accepting that the status quo has changed means founders have to cut expectations of themselves and what they hoped to achieve in 6/12/18 months. Instead of cutting burn, many will start the hamster wheel of trying to raise money, even at unfavorable terms, and realize the reality only too late. Short answer: burn rates will continue to be high until too late into the down cycle. So current levels matter, a lot.
  - lsc 11y ago
    I kinda assume that if easy money is over (and I don't know that it is. That would be my guess, but it's just a guess) - if easy money is over, then the startups that depend on easy money are probably mostly doomed, but that seems obvious and uninteresting. I was talking about the next generation of startups... if this generation is, in fact, doomed, there are going to be, for example, more supply and less demand for small office sublets in the trendy parts of town

Does anyone have an estimate on the average burn rate for a startup in San Francisco? Seems important these days, given talk of the end of easy money (see @bgurley)

presty 11y ago

https://medium.com/@DanielleMorrill/is-my-startup-burn-rate-normal-882b2bd20f02 https://medium.com/@DanielleMorrill/is-my-startup-burn-rate-...

7Figures2Commas 11y ago
This company's burn rate is over $400,000 now according to http://mattermark.com/how-we-spend-money-at-mattermark/ http://mattermark.com/how-we-spend-money-at-mattermark/.
btown 11y ago
It's abnormally risky to raise only enough money for 17 months of runway. I wish Mattermark the best, but this level of burn is not the most confidence inspiring.
- dmor 11y ago
  From what we understand from investors, it is actually pretty typical to raise enough money for 18 months of runway. Additionally, we still had ~1.5m in the bank when we raised. I will certainly report back on how it goes though!

lsc 11y ago

I would think that the end of easy money would have a huge effect on the prices of things that startups buy. In other words, if @bgurley is right and the economics of money-losing companies have changed significantly, then historical burn rate numbers (from 'easy money' times) are not going to be particularly useful to you.

webmasterraj 11y ago
Cutting burn rate is notoriously hard to do. Startups are built on dreams, and every single one of them has a longer list of things it wants to do than the capability to do them. Accepting that the status quo has changed means founders have to cut expectations of themselves and what they hoped to achieve in 6/12/18 months. Instead of cutting burn, many will start the hamster wheel of trying to raise money, even at unfavorable terms, and realize the reality only too late. Short answer: burn rates will continue to be high until too late into the down cycle. So current levels matter, a lot.
- lsc 11y ago
  I kinda assume that if easy money is over (and I don't know that it is. That would be my guess, but it's just a guess) - if easy money is over, then the startups that depend on easy money are probably mostly doomed, but that seems obvious and uninteresting. I was talking about the next generation of startups... if this generation is, in fact, doomed, there are going to be, for example, more supply and less demand for small office sublets in the trendy parts of town