Burn Rate Vs Return Rate
Burn rate tells the per month payment of cash for various expenses when we start a new business. For example, a person makes partnership firm for selling the small family products. For this, he has to invest money in the form of raw material, shops, vehicles and other expenses in new partnership. If we calculate it and find per month cash expenses, it will our burn rate.
Return rate is the rate of return on total investment. If you get money from other, you will tell the return rate not burn rate. But it is the duty of investor to estimate the burn rate before investing the money. Past cash flow statements may help to find burn rate in which you are investing your money. Dharmesh Shah suggested in Onstartups , if you see that company is burning your cash with high burning rate, you should start using smaller bills.