Back when Silicon Valley Bank was still pitching a package of financial moves to its customers, it noted in a presentation to its own investors that “elevated client cash burn” was “pressuring [its] balance of fund flows.”

The previously central bank to Silicon Valley told the stock market that while it had anticipated a “modest, progressive” decline in startup cash consumption as venture dollars slowed, burn had “not moderated” in the first quarter of 2023. This hurt its deposit base, which in turn was a precipitating factor in the run that later smashed the bank.

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Reading through the bank’s notes before it failed a few dozen hours later, this column pulled out the burn statistic as the most interesting nugget from SVB’s asset sale and debt shakeup. Whoops.

Regardless of our inability to note an incipient bank run, the dataset formed an interesting conclusion in our minds: Startups were failing, at least in the United States, to truly reduce their burn rates.

New data paints a slightly more nuanced picture. Thanks to Brex data shared with SaaSletter, we can get a bit more granular. It turns out that when you compare later-stage startup spending cuts with their earlier peers, the bigger startups are doing a better job.

The question, then, is whether that makes sense. Let’s explore.

Cut spend, cut burn

Recall that in the first quarter we saw late-stage round sizes and valuations fall sharply. Capital flowing into larger, more richly valued startups is in retreat, and unicorns are currently wedged between a rock (falling venture capital investment), a hard place (a completely dead IPO market and slow M&A activity for companies of their size) and a rocky hard place (the fact that many late-stage startups are carrying paper valuations that will not convert into new investment at par).