Many businesses measure their financial performance through revenue growth or profitability. However, neither of these metrics answers a more immediate and critical question: how long can your business continue operating with the cash available today? This is where burn rate becomes a decision-making tool, not just a financial metric. At its core, burn rate meaning
What Do Burn Rate and Runway Tell You About Your Business? Read More »
A prerequisite for every business is to maintain a sound business plan that includes meaningful financial projections. This is especially important for startup companies since their failure rate in the first year of operation is extremely high and #1 reason for failure is the startup ran out of cash. Financial projections help companies get insight
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The scorecard valuation method is a popular, pre-money valuation method for early-stage startups. In this method, a startup is valued based on an adjusted benchmark value. The central idea is that a startup should be valued in line with comparable startups (similar in terms of geographical location, industry, market potential, and development stage). Next, the
Scorecard valuation method: How to value a startup with no revenues? Read More »
Key reasons why you need a business plan for your startup 1. A roadmap to success To succeed in today’s competitive environment, you need a sound business plan and solid execution capabilities. A critical step is to develop a thorough understanding of your competitive environment and to identify the key drivers that will determine your
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The Berkus method provides entrepreneurs and early-stage investors with a simple framework to value a pre-revenue startup by focusing on risk factors instead of financial projections. This method is useful for founders and early-stage investors (angels, early-stage venture capital, and crowdfunding backers). However, the model’s simplicity does not replace the need to perform comprehensive due
The Berkus method: an elegantly simple model to value a pre-revenue start-up Read More »