Hi everyone,

I’m the CEO of a small software company, and I’m currently doing some research on the burn rates of other software companies. I’m interested in understanding the range and factors that influence the burn rate in our industry.

If you’re comfortable sharing, I’d love to hear about your experiences:

  1. Company Size and Stage: (e.g., startup, growth stage, established)
  2. Average Monthly Burn Rate: (How much cash your company typically spends more than it earns in a month)
  3. Key Factors: (What are the major contributors to your burn rate? E.g., staff costs, marketing, R&D)
  4. Strategies to Manage Burn Rate: (Any effective strategies you’ve implemented to manage or reduce your burn rate)
  5. Lessons Learned: (Any insights or advice you can share based on your experience)

Your input will be incredibly valuable to myself and potentially to other entrepreneurs and CEOs in this community. Thank you in advance for your willingness to share and help!

Best

  • garma87@alien.topBEnglish
    1·
    1 year ago

    I’m happy to share, I worked at a few big and small software companies and I have my own now; mind you my experience is mainly b2b

    I’d say 90% of cost at a software company is people. Unless you’re doing something very high tech, but normally it’s people. Marketing costs generally should be quite low (events mainly). Office space is not cheap but also not a huge cost

    Then in the beginning it’s mainly tech. I’ve seen companies up to 50 people with 60% tech.

    Once you have product market fit you start investing in marketing and sales. Once established it’s not weird to have 25% tech and the rest in other functions

    A variable is consultancy and support. This depends on your market. In b2b this will also be quite sizable eg 25%. Unless you outsource it

    Supporting roles about 10%.

    Everything depends on these numbers. Just multiply nr of people by cost per person (annual salary plus 25%) and you have a good estimate