Dear SaaStr: Why Do So Many Startups Burn Through So Much Cash?
SaaStr
NOVEMBER 2, 2022
Dear SaaStr: Why Do So Many Startups Burn Through So Much Cash? Competition. For most software / internet companies, the gross margins approach 80%. That means for every $10 you bring in, you get to keep at least $8 for payroll, etc. after paying off expenses. In the early days, that’s not a lot of money. You may need to work for a $0 salary, sacrifice, skimp, borrow money from mom and dad, etc.
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