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DC

Dalton Caldwell

10/23/24

@ Y Combinator

Burn rate refers to the amount of money a startup spends each month; it's crucial for founders to monitor this to ensure they don't run out of funds, even if they have high revenue.

Video

Starting A Company? The Key Terms You Should Know | Startup School

@ Y Combinator

Starting A Company? The Key Terms You Should Know | Startup School

10/23/24

Related Takeaways

Tom Blomfield

12/16/23

@ Y Combinator

Include burn rate and runway in investor updates; these metrics are crucial for understanding your startup's financial health.

Y Combinator Cast

04/28/17

@ Y Combinator

Founders should know key metrics like cash position and burn rate to communicate effectively with investors.

Kirsty Nathoo

08/22/19

@ Y Combinator

Calculating your burn rate is straightforward: it's the difference between money in and money out, which you can find in your bank statements.

Y Combinator Cast

02/13/25

@ Y Combinator

Investors can help guide startups by encouraging transparency about financial metrics like runway and burn rate, which are essential for maintaining focus and discipline.

Ooshma Garg

09/08/18

@ Y Combinator

Our monthly burn was kept low at $40,000 by maintaining a small team of co-founders, which allowed us to extend our runway while iterating on our product.

Y Combinator Cast

02/13/25

@ Y Combinator

When startups raise funds, they often mistakenly assume they need to spend a set amount each month, which can lead to unnecessary expenses instead of focusing on lean operations.

Kirsty Nathoo

08/22/19

@ Y Combinator

Your runway is how long you can operate before running out of money, calculated by dividing your bank balance by your average burn rate.

Brad Flora

02/13/25

@ Y Combinator

As a startup grows, it's crucial to monitor revenue per employee, ensuring that this number increases over time to avoid over-hiring and inefficiency.

Kirsty Nathoo

08/22/19

@ Y Combinator

Most startups fail because they run out of money, but you can avoid this by understanding your cash balance, expenses, and having a clear plan for profitability.