A Low Burn Multiple is Great. But — It Doesn’t Mean You Won’t Run Out of Money.
SaaStr
JANUARY 2, 2024
David Sacks classic post on Burn Rate Multiple is A+ and a key metric for every venture-backed startup. It simplifies a lot of complexity into one metric. That if you’re venture-backed, yes, you do have money to spend (and burn). But the best burn less each month than they bring in in new bookings and revenue (a Burn Multiple of 1x or less).
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