We just wrapped up a series on The Board Of Directors which was preceded by a series on The Management Team. I have come to like the series format for MBA Mondays because it allows me to plan out a series of up to ten posts in a row and then work on them one at a…

Continue readingMBA Mondays: Where To Go Next?

In last week’s MBA Mondays, I wrote about burn rates at three stages of a startup. The first stage is what I called “Building Product Stage” and I suggested that a burn rate of $50k/month was appropriate for that stage.

I got a fair bit of pushback in the comments for that part of the post. My…

Continue readingHow Much To Burn While Building Product

In the comments to last week’s Burn Rate post, I was asked to share some burn rates from our portfolio. I can’t do that. But an alternative suggestion was to write a post suggesting some reasonable burn rates at different stages. I can do that and so that’s the topic of today’s post.

The following applies to…

Continue readingBurn Rates: How Much?

MBA Mondays is back after a week off. Today we are going to talk about burn rate, or cash burn rate to be more specific.

Your burn rate is the speed at which your cash balance is going down. If you had $1mm in cash on January 1st, and now it is October 1st and you have $250,000…

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When I was in business school 25 years ago, I don’t recall the term sustainability used. Maybe it was, but it certainly didn’t register in my brain. The mantras that I recall were return on investment, shareholder value, revenue growth, and driving efficiencies in the business.

But as I look at many of the challenges facing businesses today, it seems…

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Last week on MBA Mondays I posted about the difference between CFO and VP Finance. In the comments to that post, I was asked about VP Eng vs CTO and I figured that had the makings of a good post too. So here we go.

Like VP Finance & CFO, the differences in the two…

Continue readingVP Engineering Vs CTO

Today on MBA Mondays we are going to talk about the financial leader in an organization. Sometimes this person is called the VP Finance and sometimes they are called the CFO. What is the difference? When will a VP Finance do? And when do you need a CFO?

Like all titles, they can get mangled. A person might be promoted…

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Last week I pointed out that when your company is sold at price points around or below prices where you have financed your company then your proceeds in a sale transaction will not equal your fully diluted ownership percentage times the sale price. You will get less because some or all of the preferred shareholders will choose to take their…

Continue readingLiquidation Analysis (Continued)

Last week we talked about the cap table and I showed an example of one in a format I like. So if you are one of the founders and you own 19.6% of the business after three rounds of venture financing and you sell the company, is it possible that you would get less than 19.6% of the proceeds…

Continue readingLiquidation Analysis

Cap Tables (short for capitalization tables) are spreadsheets that show how much everyone owns of the company. You can get a stockholder ledger from your lawyer that will list all the stockholders and show how many shares or options they have, but I don’t consider that a cap table.

For the past 25 years, I’ve used a simple form, mostly…

Continue readingMBA Mondays: Cap Tables