#The Saerom Technology Case — Fund Size Is Not the Same as Company Safety
In 1999, Saerom Technology listed on Korea's KOSDAQ exchange and hit a ₩5T market cap. In 2000, it raised ₩370B in a rights offering and moved into aggressive expansion, centered on a free internet phone service called Dialpad. But the cash burned through expansion faster than the revenue model could mature, and combined with the dot-com crash, the company ultimately shut down.
- Right after its 1999 listing — market cap hits ₩5T
- 2000 — raises ₩370B in a rights offering, accelerates expansion
- 2001 to 2002 — the revenue model never matures, cash burns through quickly
- The dot-com crash — follow-on funding dries up
- Outcome — the company shuts down
#Burn Creeps Up Right After Fundraising — 5 Common Traps
The moment funding lands, a company's burn climbs step by step. There are five common traps: bulk hiring, office expansion, accelerated marketing, launching a new business line, and upgrading tools. Each looks reasonable on its own, but running all five at once can cut your capital by more than half within 12 months.
| Trap | Common Justification | Real Risk |
|---|---|---|
| Bulk hiring 15+ people | Let's scale the team fast | Monthly burn jumps 2 to 3x, alignment costs spike |
| Office expansion | We're out of space | Fixed costs rise permanently, pressure builds for the next round |
| Marketing spend up 3 to 5x | Accelerate growth | Exposure to inefficient CAC channels, cash burns fast |
| Launching a new business line | This is the core message of the round | Existing business loses resources, both efforts risk failing |
| Tooling and infrastructure upgrades | Improve efficiency | Monthly SaaS costs rise, plus a learning curve |
#A Series B Burn Rate of ₩400M a Month — the Weight of This Stage's Responsibility
The standard ranges are: seed monthly burn of ₩50M–100M, Series A monthly burn of ₩100M–300M, and Series B monthly burn of ₩300M–600M. At a Series B burn of ₩400M a month, that is ₩4.8B gone in a year and ₩7.2B gone in 18 months. Even a ₩10B round can lose half its value within 12 months if it is spent carelessly on expansion.
| Round | Standard Monthly Burn | 18-Month Cumulative Burn | Standard Round Size |
|---|---|---|---|
| Pre-Seed / Seed | ₩20M–50M | ₩360M–900M | ₩500M–1.5B |
| Series A | ₩100M–300M | ₩1.8B–5.4B | ₩3.0B–10B |
| Series B | ₩300M–600M | ₩5.4B–10.8B | ₩10B–30B |
| Series C | ₩500M–1.5B | ₩9.0B–27B | ₩30B–100B |
#The First 12 Months After Fundraising — the Most Dangerous Stretch
The 12 months right after fundraising are often treated as an 'easy period,' but they are actually the most dangerous stretch. The comfort of having plenty of cash on hand makes bad decisions more expensive. That is the essence of how a ₩5T market-cap company like Saerom Technology ended up shutting down.
- Trap 1 of the 12 months — accelerating hiring, marketing, and expansion all at once
- Trap 2 — running a new business line in parallel
- Trap 3 — with no near-term revenue pressure, experiments just keep piling up
- Trap 4 — missing the window to start preparing for the next round
- Trap 5 — the KPI dashboard never gets built out, leaving the company with poor visibility
#The First 90 Days After Closing — What to Set Up First
The first 90 days after closing are for building your systems. Establishing burn control, a KPI dashboard, a budgeting process, and board operations during this window sets up a stable next 12 months.
| Weeks | What to Set Up | Deliverable |
|---|---|---|
| Weeks 1–2 | Measure your burn-rate baseline | Monthly burn and runway dashboard |
| Weeks 3–4 | Build a 12-month budget | Department budgets and an approval process |
| Weeks 5–8 | Define KPIs and build a dashboard | Automated weekly and monthly reporting |
| Weeks 9–10 | Set Q1 OKRs | Company and team OKRs |
| Weeks 11–12 | Run your first board meeting | A recurring quarterly reporting template |
#The Capital Efficiency KPI — Burn Multiple
The standard metric for measuring a company's capital efficiency after fundraising is the Burn Multiple: net burn divided by net new ARR. Under 1.0 is excellent, 1 to 2 is standard, 2 to 3 calls for caution, and above 3 signals capital inefficiency that will make the next round difficult.
| Burn Multiple | Assessment | Next-Round Negotiating Power |
|---|---|---|
| < 1.0 | Best-in-class | Premium valuation possible |
| 1.0–1.5 | Strong | Terms you want |
| 1.5–2.0 | Standard | Normal negotiation |
| 2.0–3.0 | Caution | Valuation pressure begins |
| > 3.0 | Inefficient | Difficult round, cleanup recommended |
#The New-Business-Line Trap — Stabilize the Core Business First
If launching a new business line was a core message in your fundraising pitch, you will feel pressure to pour resources into it as soon as the round closes. But moving into a new business before your existing one is stable often destabilizes both. This is close to the essence of the Saerom Technology case as well.
- Existing business — keep revenue growing at least 2x year over year, with a Burn Multiple under 1.5
- New business — a separate team of 5 to 10 people, separate KPIs, walled off from the core business's resources
- Budget — cap the new business at 20 to 30% of the round
- Deadline — commit to a 6-month first validation window for the new business, with a promise to shut it down if it fails
- Reporting — report on it separately to the board each quarter
#Self-Check — Are Your Post-Funding Operating Systems Ready?
- Is your monthly burn and runway dashboard automated?
- Is your 12-month budget built out by department, with an approval process?
- Do you calculate your Burn Multiple every quarter?
- Can your KPI dashboard generate weekly reports automatically?
- Do you have a standing quarterly board reporting template?
- If you launch a new business line, are a separate team, budget, and shutdown deadline already defined?
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