How to balance growth and burn rate in startups?

Become Default Investable:

  1. Burn Multiple

Key Takeaways

  1. You can have an ambitious upside, but your runway planning should be based on more conservative growth.
  2. Keep a close eye on net new ARR, be fast to adapt and have a “burn budget”.
  3. If you cant become “default alive”, become “default investable”.
  4. Depending on your burn multiple, and your sales efficiency number, you may want to move budget from G&A, R&D, to S&M, the other way round, or reduce cost across the board.

Bonus Tips to Increase Runway

  1. Switch more customers to upfront payments
  2. De-grandfather customers on old, lower — pricing plans.
  3. Try increasing your pricing
  4. Let go of your bottom 5–10% performers.
  5. Move on from any VP that isnt amazing. (Good idea even if you have enough runway)
  6. Get better at collections
  7. Renegotiate with your vendors.
  8. Reduce paid marketing spend.
  9. Consider venture debt or revenue based financing.

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Ravi Kumar.

Ravi Kumar.

1.3K Followers

Building nextgen real estate platform at PriceHubble & podcaster at productlessons.com. I blog about products, business around products, and growth strategies.