daily articles for founders

Silicon Valley burn rates  

How much money do those Silicon Valley companies burn every month?

Insane amounts, it seems. If Fred Wilson's post is correct (and I see no reason to doubt it), the average pre-revenue seed company is burning as much as $50k a month. Companies trying to accumulate users double that. And companies trying to "build the business" spend as much as $250k every month.

Compare this with London (hardly a cheap city), where most startups that I've dealt with (and whose accounts I've discussed with them) burn anything from £0 to maybe a few thousand pounds a month - at least until they hit revenues - and then try to grow organically.

It's a different world... One wonders why Silicon Valley VCs don't invest more here. If burn rates are an indication, building a business is about 10x cheaper in London than in Silicon Valley.

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7 startup post-mortems
Don't register your idea as a company
Why it's hard to find technical cofounders
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