Burn Rate

What the greatest technology investors say about Burn Rate

Bootstrapping Leads to Great Products & Great Companies

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

Wilson suggested a $50k/month burn rate for the “building product stage”, the first of a startup’s three stages.  “You can build a product for less than $50k/month, [especially with strongly technical founders having excellent product and design skills.] [] Many (most??) of [Wilson’s] early stage investments are in companies that have bootstrapped in this way.”  However for companies that can raise seed stage money to build product, “[Wilson stands by a maximum $50k/month fully-burdened burn rate], but with a big caveat.  If [the product can be built] for less,[] do that.  Bootstrapping is a great thing and leads to great products and great companies.”  Fred Wilson, How Much To Burn While Building Product, Dec. 19, 2011; http://www.avc.com/a_vc/2011/12/how-much-to-burn-while-building-product.html