Burn Rate [...]

A term, used by tech entrepreneurs and investors, to describe how quickly a startup is "burning" through their cash reserves, i.e. their venture capital investment.

Here is investor Fred Wilson back in 2011:

A good rule of thumb is multiply the number of people on the team by $10k to get the monthly burn. That is not the number you pay an employee. That is the "fully burdened" cost of a person including rent and other related costs.

I do a lot of "back of the envelope" math on startups to ascertain how long their runway might be. Most often, particularly with ed-tech startups who have a free product and a large marketing team, the calculation ends with "not long at all."

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Audrey Watters

Writer. Troublemaker.