This Rocket is Launching, page-54

Not intending to take a cheap shot, apologies if my comment caused any offence HotDog.

A hyper growth SaaS company should generally raise enough cash for 12-18 months. The challenge then becomes managing the burn rate carefully, to ensure that the company grows to the next “inflection point” (a point when certain milestones are achieved, and the valuation increases enough for the company to go for its next round of funding).

Burning too quickly means that you underestimate the cost of growth and will be back on the road raising funding much too soon (a time-consuming activity that distracts the CEO and other senior management form running the company). Burning too slowly, on the other hand, is not appreciated by investors, despite the common belief, shared by many founders, that stretching their funding longer should always be the goal.

If you are not spending enough then you are not growing the company fast enough to get to the next inflection point, which in turn would slow down the path to an exit point in time for your investors to have the right return on their investment.

T.E.P.