Ask HN: How much money is acceptable for a startup to spend Pre-Revenue?

3 points

11 years ago

It seems that many founders raise millions by overvaluing their startups without proving that their business model works. Secrect and Fab.com come to mind. They make bank, cash out and close shop.

I just read this post and this startup seems to be spending all the dollars they have left in order to prove the business model. They have less then 4 months left. Is this too crazy? http://startuplabs.com/blog/why-do-we-spend-so-much-money-pre-revenue/

Mark Suster has a pretty good post about this topic here: http://www.bothsidesofthetable.com/2014/09/28/what-is-the-right-burn-rate-at-a-startup-company/

He says to be very careful about ever dipping below 6 months of cash in the bank.

Question for all of you: How much money is acceptable for a startup to spend Pre-Revenue?

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