Business 101 for startups by Fred Wilson
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…
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…
Continue readingSustainability
We got so many ideas for this Business Arcanery series on MBA Mondays that I’m not going to do it as a series. I am going to do one of these every month. There is enough business arcanery out there that I could do a years worth of weekly posts without running out of material.
We’ll…
Continue readingBusiness Arcanery: Going Concern
I’m going to do a series on Business Arcanery. I don’t even know if arcanery is a word, but I like it so we are going to use it as a name for this series. It is about arcane words that are used in business but regular people have no idea what they mean. We are going to decode the code words…
Continue readingA New MBA Mondays Series: Business Arcanery
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…
Continue readingVP Finance vs CFO
Back when we were doing our MBA Monday series on Financing Options For Startups, I got an email from my friend Andy Sack. Andy was one of the first entrepreneurs we funded by in the mid 90s with our Flatiron Fund. He’s done something like a half dozen startups since then and he’s a veteran in…
Continue readingRevenue Based Financing
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