Glossary Term
Burn Rate
Definition
Burn Rate refers to the rate at which a company spends its available capital over a specific period, typically measured monthly. In the MedTech industry, burn rate is a critical metric for startups and early-stage companies, as it indicates how quickly funds are being depleted and how long the company can operate before needing additional funding.
Relevance to the MedTech Industry
Burn rate helps MedTech companies manage their financial health by monitoring cash flow and planning for funding requirements. It is especially important for R&D-intensive industries, where significant upfront investments are required for product development, clinical trials, and regulatory submissions.
Additional Information & Related Terms
Runway The length of time a company can operate before depleting its funds, calculated using the burn rate.
Seed Funding Early-stage capital often used to manage burn rate during initial development.
Cash Flow Management Helps MedTech companies optimize spending to control burn rate.
Venture Capital (VC) A common source of funding for companies with high burn rates.