Understanding Burn Multiple and Startup Efficiency

41sec Snip

00:00

Play full episode

Summary

Transcript

Episode notes

Efficiency is key when looking at a startup's burn multiple, which measures how much money is burned compared to growth. A burn multiple of one is very good, while a multiple above two is excessive. Any multiple between one and two is considered pretty good, while a multiple of one or less is outstanding.

This Week in Startups is brought to you by…

House of Macadamias is the next big health trend! Get 20% off your first purchase and a free box of Namibian Sea Salted Macadamia Nuts at houseofmacadamias.com/twist by using code twist20!

Vanta. Compliance and security shouldn't be a deal-breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. TWiST listeners can get $1,000 off for a limited time at vanta.com/twist

Fitbod. Tired of doing the same workouts at the gym? Fitbod will build you personalized workouts that help you progress with every set. Get 25% off your subscription or try out the app for FREE when you sign up now at fitbod.me/TWIST.

Today’s show:

SaaSGrid Co-Founders Ethan Ruby and David Sacks join Jason to demo SaaSGrid and break down the solution it provides for founders (3:12). They also cover the software recession (26;18), AI’s impact on SaaS (36:41), and much more!

Time stamps:

(0:00) David Sacks and Ethan Ruby join Jason

(3:12) The solution SaaSGrid provides for founders

(7:02) Ethan demos SaaSGrid

(9:25) House of Macadamias - Get 20% off and a free box of Namibian Sea Salted Macadamia Nuts at https://houseofmacadamias.com/twist by using code TWIST20

(10:45) Burn multiple and startup efficiency

(16:27) Fixed cost of a SaaS business today and major roadblocks in SaaS

(20:40) Determining target customers and when outbound makes sense

(25:10) Vanta - Get $1000 off your SOC 2 at https://vanta.com/twist

(26:18) Headwinds against SaaS and the software recession

(30:12) The MRR chart and analyzing contraction and churn

(35:13) Fitbod - Get 25% off at https://fitbod.me/twist

(36:41) AI’s impact on SaaS companies

(41:47) The ZIRP/COVID-19 bubble and founders skipping funding rounds

(44:37) The 3 MOST important things for SaaS companies to pay attention to

Check out SaaSGrid: https://www.saasgrid.com/

FOLLOW Ethan: https://twitter.com/ethanjruby