burn rate

(redirected from kiln-fired brick)
Also found in: Medical, Encyclopedia, Wikipedia.

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 amount of money that a company spends each month from the amount it has raised from venture capital. For example, if a company is spending $100,000 per month, it is said to have a burn rate of 100,000. The burn rate is measured until the company begins to have a positive cash flow. If the burn rate exceeds expectations or cash flow remains negative for too long, the company may have a difficult time becoming profitable.

burn rate

The speed with which a company consumes cash, generally stated on a monthly basis. A high burn rate indicates a firm will soon be out of business unless it can raise additional capital, dramatically increase cash sales, or reduce expenses. The burn rate was particularly high for dot-com companies that placed emphasis on capturing market share rather than profitability.