MBA Mondays is back after a week off. Today we are going to talk about burn rate, or cash burn rate to be more specific.
Your burn rate is the speed at which your cash balance is going down. If you had $1mm in cash on January 1st, and now it is October 1st and you have $250,000 left, your burn rate is $750,000/9, or $83,333/month. Just to be perfectly clear the $750,000 in this calculation is the amount of cash that has gone out the door ($1mm minus $250,000 is $750,000). And the 9 is the number of months that have transpired (January through September is nine months).
To read the full, original article click on this link: A VC: Burn Rate
