Re: Assuming no revenues this year, approximately what would be our burn rate???
posted on
May 07, 2010 01:02PM
Oh, the appeal to authority game? I'll even source my quotes.
The rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow from operations. In other words, it's a measure of negative cash flow.
http://www.investopedia.com/terms/b/burnrate.asp
Burn rate is a synonymous term for negative cash flow. It is a measure for how fast a company will use up its shareholder capital. If the shareholder capital is exhausted, the company will either have to start making a profit, find additional funding, or close down.
http://en.wikipedia.org/wiki/Burn_rate
For a company with negative cash flow, the rate of that negative cash flow, usually per month. Often used by venture capitalists to measure how much time a startup has to reach positive cash flow before they run out of money or require additional funding.
http://www.investorwords.com/622/burn_rate.html