3 ms·
Burn rate is one of the few variables a startup can control. It matters. A lot. I know burn rate can't be analyzed in a vacuum (how many variables can be?),
by gz5 12y ago
Burn rate is one of the few variables a startup can control. It matters. A lot.
I know burn rate can't be analyzed in a vacuum (how many variables can be?), and a high burn rate can be a good thing, but my guess is more companies fail (partially) due to poor management of capital than fail due to spending too slowly.
Are there many examples of the latter that anyone knows of, even if somewhat anecdotal?
- tjradcliffe 12y agoNo examples, but the observation that a great deal of success depends on luck, or chance, or whatever you want to call it. Factors beyond your immediate control. The lower your burn rate the longer your runway, all else being equal. The longer your runway, the more opportunities you have for the dice to roll your way. Admittedly, all else will not be equal as your vary your burn rate, but keeping it down the bare minimum required to do the essential technological development, business development, marketing and sales will always give you better odds of long-term success. That "bare minimum" rate may actually be very high, but it's still something any CEO should be paying careful attention to.