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Burn rate
The rate at which a company uses up its venture capital to finance operations (i.e., the rate of negative cash flow), usually quoted as a monthly figure.
Burn rate
Used in venture capital financing to refer to the rate at which a startup company expends capital to finance overhead costs prior to the generation of positive cash flow.
Burn rate
The rate at which a company is spending its cash reserves.The term is associated strongly with dotcom companies, many of which have been launched with venture capital money and in some cases have raised more money by coming to market via a new issue, but few of which have revenues anywhere close to their monthly outgoings.Boo.com, the online fashion retailer that went spectacularly bust in mid-2000 extended new reach to the burn rate measurement. In 16 months it went through £91 million put up by investors.
Similar MatchesYield burningYield burning
A municipal bond financing method.
Underwriters in advance refundings add
large markups on US Treasury bonds bought and held in escrow to compensate
investors while waiting for repayment of
old bonds after issuance of the new bonds.
Since bond prices and yields move in opposite
directions, when the bonds are marked up, they
"burn down" the yield, which may
violate federal tax rules and diminishes tax revenues.
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