Word of the Day: Burn Rate In venture investing and new company development, the #burnrate is the speed at which a new company is spending its capital while waiting for profitable operation. Typically, a new company in its early stages expects to spend money faster than it can take in revenue. When the burn rate begins to exceed what has been planned or revenue fails to meet expectations, the usual recourse is to reduce the burn rate, which usually involves reducing the companys staff. The term is often seen in #financial reviews and discussions about new Internet companies, public or private, where the question is whether revenue will begin to flow in sufficient amounts before the #investedcapital plus revenue is burnt up.
Posted on: Mon, 07 Jul 2014 15:02:41 +0000
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