How can you manage a portfolio company with a high burn rate?

There's a lot you can do here. Here's a few: First thing I'd be doing is analyzing the burn rates of competitors and if mine is higher I'd be looking at what they're doing different. I'd look at ways to create economies of scale and an IP driven creation environment for monetization. In other words ideas that are quickly monetized with little overhead and I'd also look to create more revenue streams in the business i.e. serving new verticals or expanding horizontally. I'd be looking heavy at customer retention and highest paying longest lasting customers may be willing to pay more; hopefully it is not the type of company where burn rate increases parallel to gross revenues Obviously automate as much as you can #vc #venturecapital

Without a clear diagnosis of the causes, you cannot make an efficient strategy. That′s why is so important to locate where are the causes and how to address them.

A startup is sexy when growth exceeds burnrate. The higher the growth compared to burn rate. The better and more valuable the venture becomes, generally speaking. The issue is less about what the burn rate is. As opposed what the burn rate is producing. If you burn 2x to get 20x growth, well that’s a no brainer. Ultimately, the goal of startups is fast paced growth with a focus on the exit. Good VCs generally provide good advisory and network support. To effectively manage capital allocation.

I'd emphasize the importance of open communication with founders during this phase. It's not just about numbers but aligning on a sustainable growth path that respects the company's vision and market position.

Find out where too much money is spent so as to know the major cause of high spending. Concentrate on schemes directly responsible for generating more revenue into the organisation. Seek to enlarge market shares, attract new customers, and tweak pricing strategies in order to get more cash. Scrutinise agreements, think about outsourcing non-essential jobs, and find ways of reducing unwanted costs. Make sure that you have enough inflow to meet your financial obligations. Establish alternative plans for dealing with any monetary difficulties that may arise

A transparent reporting system (fyi - there are plenty of tools for this, such as the one we built, Vestberry) is important for tracking progress and maintaining accountability. It's all about striking the right balance between growth and sustainability.

Para otimizar a queima de caixa, é importante repensar o modelo de negócios como um todo. Dado o ticket médio e a competi??o de mercado, precisamos ter claro o nosso posicionamento e diferenciais. Quanto menor o valor, mais automático precisamos que as coisas rodem para serem escaláveis e sem depender de for?a bruta ou humana. Logo, se praticamos um pre?o para ser mais acessível, precisamos pensar em como escalar a aquisi??o via canais mais sustentáveis como produto ou marketing. O CS precisa ser mais emergencias, onde o produto é simples, entrega o que promete e resolve a jornada completa. Essa análise do ticket e modelo de negócios, pode ser um grande divisor de água para as startups conseguirem ter economias significativas!

We collaborate with startup founders to set realistic milestones that demonstrate progress and value creation, influencing future funding rounds and investor confidence. Also, We leverage their networks to help startups form strategic partnerships, access alternative funding sources, and explore opportunities for cost-effective marketing and branding collaborations.

Why is the burn rate high? That's the first question to answer! Are they making loss on a product/service level? Cost Price is X and Sales Price is less than X. Are they burning on salaries, heavy ops or what? Find the reason, understand the importance and act accordingly.

I've learnt to read numbers and understand their context. I understand, empathize, and strategize unconventionally while dealing with a high-burn portfolio company. I create realistic yet ambitious goals, turning fiscal nightmares into profit dreams. I optimize not only for efficiency but also for revolution, scalpel-cutting costs and orchestrating growth. Fundraising? I make pitches legendary, attracting investors to my table. Mentorship is my art; I inspire and encourage, turning problems into successes. Balanced interests? I master it, ensuring my ventures and I redefine success. It's not simply business; it's an ambition- and experience-painted artwork. Want to know more secrets? Learn your journey passionately.