🔥 Burn Rate Calculator
Calculate your monthly cash burn rate and runway. Know exactly how many months of cash you have left and when you need to raise funds or hit profitability.
Gross Burn Rate vs Net Burn Rate
Gross burn rate is your total monthly cash spend — salaries, rent, software, marketing, everything. Net burn rate is gross burn minus any revenue: the actual net cash you consume each month. For pre-revenue startups, gross and net burn are identical. For revenue-generating companies, net burn is what determines how long cash lasts.
How Much Runway Do You Need?
The conventional wisdom is 18–24 months of runway at any given time. Fundraising typically takes 3–6 months, so 18 months gives you time to raise before you're desperate. Desperation fundraising produces terrible terms. Investors want to fund companies with time to execute — not companies in crisis. Many VCs say "always be raising" when you have 12+ months left, not when you have 6.
People Also Ask
There is no universal good burn rate — it depends entirely on what you're building toward and your funding stage. The key metric is runway: most investors want to see 18+ months. A $100K/month burn with 24 months of runway is safer than a $20K/month burn with 8 months of runway.
The fastest levers: (1) Headcount — salaries are typically 60–80% of burn. A hiring freeze or targeted layoffs have immediate impact. (2) Defer non-essential software subscriptions and vendor payments. (3) Renegotiate office lease. (4) Reduce paid marketing spend if CAC payback is long. Revenue acceleration is slower but more sustainable than cost-cutting.
Burn rate specifically refers to the rate at which a pre-profit company spends its cash reserves. Cash flow is a broader term covering all cash inflows and outflows. A profitable company has positive operating cash flow; a burning startup has negative cash flow equal to its net burn rate.