Word of the day: burn rate

Word of the Day Daily updates on the latest technology terms |July 7, 2014

burn rate In venture investing and new company development, the burn rate is the speed at which a new company is spending its capital while waiting for profitable operation. Typically, a new company in its early stages expects to spend money faster than it can take in revenue. When the burn rate begins to exceed what has been planned or revenue fails to meet expectations, the usual recourse is to reduce the burn rate, which usually involves reducing the company's staff. 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." Quote of the Day "The cloud generally makes it easier for businesses to set up operations, especially startups looking to compete with larger established companies." - Paul Korzeniowski Quiz Question This involves selling equity in order to get out of a particular market and into a less risky investment. What is it? a. capitulation b. backhaul Answer   Related Terms Related Terms venture capital seed capital startup angel investor lean startup path to profitability Related Tags Return on investment IT spending and budgeting Corporate governance   Required Reading Talking big data technologies and Bitcoin at the MIT VC Conference The Data Mill reports on big data technologies that snag venture capital dollars and the startup showdown. Five venture capitalist firms that invest in the SDN market Venture capitalists have taken note of software-defined networking. Here are five venture capital firms investing in SDN startups. From funding to market share: Choosing a cloud computing startup The cloud is full of new companies looking to attract IT pros' business, but it's important to consider a cloud computing startup's exit strategy and how it affects enterprise IT.   Stay In Touch FOLLOW WHATIS.COM     CONTACT US For feedback about any of our definitions or to send us ideas for new definitions, please contact us at: editor@techtarget.com About This E-Newsletter This e-newsletter is published by the TechTarget network. To unsubscribe from Whatis.com, click here. Please note, this will not affect any other subscriptions you have signed up for. TechTarget, Whatis, 275 Grove Street, Newton, MA 02466. Contact: webmaster@techtarget.com Copyright 2013 TechTarget. All rights reserved.