See part one here. Rather than setting a company's burn based on their growth rate (as would be suggested by the so-called "burn multiple"), companies should consider instead setting it according to the retention characteristics (gross & net) of their business. Companies with stickier products can tolerate higher burn in the early/mid years of growth, because they're building a more reliable annuity of cash flows on the back end, and therefore have much higher operating leverage. Conversely if you turn up the burn in a company with terrible retention just because it’s in hypergrowth, you are likely committing business suicide.
9, 10 and 11 🔥🔥🔥