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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

Gross Burn vs. Net Burn. Burn rate in case you don’t know is the amount of money a company is either spending (gross) or losing (net) per month. (it Net burn is the amount of money you are losing per month. I often see companies burning $100,000 per month (net) looking to raise $6-8 million.

Startup 383
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Should Startups Focus on Profitability or Not?

Both Sides of the Table

When they look at buying your company they often think in terms of “how long will it take until I earn back the profits to pay for my acquisition price?” If you spent the 3 years perfecting some hugely differentiated technology IP that may also be different. Simplifying: Revenue -. Cost of Goods Sold (COGS) =.

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Roping in the Legal Eagles

InfoChachkie

Yet, despite his exceptional courtroom theatrics, you would be foolhardy to hire good old Johnnie to review your software cross-licensing agreement. Once you draft the straightforward text, sans the legal mumbo-jumbo, ask your lawyer to review the text to ensure your layman descriptions do not result in an unintended interpretation.