3 ms·

that's the trick, isn't it -- it's not so much your burn rate, because you understand that; it's what your customers cut if they decide there's a bubble. eg ya

by x0x0 12y ago

that's the trick, isn't it -- it's not so much your burn rate, because you understand that; it's what your customers cut if they decide there's a bubble. eg yahoo during the dotcom bubble: huge chunks of vc were flowing through to yahoo ads. That said, I don't know what Fred means, but $10k/engineer is ridiculous. That's earning well under $100k/year by the time an employer pays social security, health insurance, employment taxes, and rent. You have to be smoking crack to live in sf, home of the $3k/mo apartment, and earn so little money. A standard rule of thumb, more common in nyc than here, is your gross income needs to be 40x your rent.

diminish 12y ago
Do you mean your yearly income must be 40x your monthly rent?
- x0x0 12y ago
  yes, exactly $2k in rent -> must make $80k/year
danieltillett 12y ago
but $10k/engineer is ridiculous This is net, not gross burn. Assuming you have a viable product you should be earning (some) income.
kanwisher 12y ago
$10k a head is typically averaged across all your functions, engineering being higher and almost every other function under $10k
- ryanSrich 12y ago
  At a startup with 15 employees I'd guess around 13 are engineers (or engineer related: developers, designers, product, etc.). So wouldn't that mean startups should have a higher burn rate if they are tech heavy? If you consider an average engineer has a loaded cost of $250k per year and you have 13 of them, that means your monthly burn rate would be $270k before accounting for the other 2 employees (most likely founders taking a much smaller salary). This would also be a conservative estimate based on an average salary of $100k (which is barely scraping by in NYC and SF if you're straight out of college with loans). So this must mean startups spending less that $250k with 15 + employees are paying well under market rate (by at least $20-$50k)? But that also wouldn't correspond with the salaries being offered via Angel list and Glassdoor. So something isn't lining up here.

by x0x0 12y ago

diminish 12y ago

Do you mean your yearly income must be 40x your monthly rent?

x0x0 12y ago
yes, exactly $2k in rent -> must make $80k/year

danieltillett 12y ago

but $10k/engineer is ridiculous This is net, not gross burn. Assuming you have a viable product you should be earning (some) income.

kanwisher 12y ago

$10k a head is typically averaged across all your functions, engineering being higher and almost every other function under $10k

ryanSrich 12y ago
At a startup with 15 employees I'd guess around 13 are engineers (or engineer related: developers, designers, product, etc.). So wouldn't that mean startups should have a higher burn rate if they are tech heavy? If you consider an average engineer has a loaded cost of $250k per year and you have 13 of them, that means your monthly burn rate would be $270k before accounting for the other 2 employees (most likely founders taking a much smaller salary). This would also be a conservative estimate based on an average salary of $100k (which is barely scraping by in NYC and SF if you're straight out of college with loans). So this must mean startups spending less that $250k with 15 + employees are paying well under market rate (by at least $20-$50k)? But that also wouldn't correspond with the salaries being offered via Angel list and Glassdoor. So something isn't lining up here.