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Finance Dictionary and Glossary of Investment Terms
Burn rate
Definition 1.
Used in venture capital financing to refer to the rate at which a start-up company expends capital to finance overhead costs prior to the generation of positive cash flow.
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Definition 2.
The rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow from operations. In other words, it's a measure of negative cash flow.
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Definition 3.
For a company with negative cash flow, the rate of that negative cash flow, usually per month. Often used by venture capitalists to measure how much time a startup has to reach positive cash flow before they run out of money or require additional funding.
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