Browse Definitions :
Definition

burn rate

In venture investing and new company development, the burn rate is the rate at which a new company is spending its capital while waiting for profitable operation. Typically, a new company, especially in new, fast-growing fields such as Internet commerce or publishing, expects in its early stages to spend money faster than it can take in revenue. The term is often seen in financial reviews and discussions about new Internet companies, public or private, where the question is whether revenue will begin to flow in sufficient amounts before the invested capital plus revenue is "burnt up." When the burn rate begins to exceed plan or revenue fails to meet expectations, the usual recourse is to reduce the burn rate (which, in most companies, means reducing the staff). When it is burnt up (or before), a company has to find additional capital through loans, private equity investors, or a public stock offering; merge with or sell itself to another company; go non-profit; or terminate its operation.

Michael Wolff's book, Burn Rate (subtitled "How I Survived the Gold Rush Years on the Internet"), describes the emotional peaks and valleys associated with the term.

This was last updated in June 2005

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

Extensions de fichiers et formats de fichiers

Motorisé par:

SearchCompliance

  • risk management

    Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings.

  • compliance as a service (CaaS)

    Compliance as a Service (CaaS) is a cloud service service level agreement (SLA) that specified how a managed service provider (...

  • data protection impact assessment (DPIA)

    A data protection impact assessment (DPIA) is a process designed to help organizations determine how data processing systems, ...

SearchSecurity

  • Web application firewall (WAF)

    A web application firewall (WAF) is a firewall that monitors, filters and blocks data packets as they travel to and from a ...

  • spyware

    Spyware is a type of malicious software -- or malware -- that is installed on a computing device without the end user's knowledge.

  • application whitelisting

    Application whitelisting is the practice of specifying an index of approved software applications or executable files that are ...

SearchHealthIT

SearchDisasterRecovery

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

  • disaster recovery team

    A disaster recovery team is a group of individuals focused on planning, implementing, maintaining, auditing and testing an ...

  • cloud insurance

    Cloud insurance is any type of financial or data protection obtained by a cloud service provider. 

SearchStorage

  • DRAM (dynamic random access memory)

    Dynamic random access memory (DRAM) is a type of semiconductor memory that is typically used for the data or program code needed ...

  • RAID 10 (RAID 1+0)

    RAID 10, also known as RAID 1+0, is a RAID configuration that combines disk mirroring and disk striping to protect data.

  • PCIe SSD (PCIe solid-state drive)

    A PCIe SSD (PCIe solid-state drive) is a high-speed expansion card that attaches a computer to its peripherals.

Close