Knowledge@Wharton: Can you tell us about your research?
Ron Berman: What our paper looks at is how the burn rate of startups influences the chances of a startup to go bankrupt. The burn rate, which is more of an industry term, is how much money does a startup spend every month per employee. For example, if a company spends $300,000 every month and they have five employees, the burn rate would be $60,000 per employee. It’s a number typically the industry uses to compare different companies and see which ones are burning too much or too little money.
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