Burn Rate Calculator
Calculate monthly gross and net burn rate for your startup. Understand how fast you are spending cash and how long your current funding runway will last.
🔥 Startup Finance💼 Net Burn = Cash Out - Cash In (monthly)
Monthly cash outflows / expenses ($)
Monthly revenue / cash inflows ($)
Current cash on hand ($)
Please enter valid values.
Formula & Reference
| Variable | Formula | Units |
|---|---|---|
| Burn Rate Calculator | Net Burn = Cash Out - Cash In (monthly) | $/month |
Step-by-Step Examples
Example 1
Early-Stage Startup
$80k/mo expenses, $20k revenue, $1M cash.
- Gross burn: $80k | Net burn: $60k
- Runway: $1M / $60k = 16.7 months
✓ $60k net burn, 16.7 months runway
Example 2
Pre-Revenue
$50k/mo expenses, $0 revenue, $500k cash.
- Net burn = gross burn: $50k
- Runway: 10 months - need to fundraise now!
✓ 10 months runway - urgent fundraise needed
Example 3
Revenue-Growing
$120k expenses, $90k revenue, $2M cash.
- Net burn: $30k/month
- Runway: $2M / $30k = 66.7 months - very comfortable
✓ 66.7 months runway, well-funded
Real-World Applications
Startups
Know exactly when you'll run out of money and when to start fundraising.
VCs
Burn rate and runway are among the first metrics asked in investor diligence.
CFOs
Track net burn weekly to identify spending spikes before they threaten runway.
Founders
Set burn budget discipline around a target runway threshold (12-18 months preferred).
Common Mistakes to Avoid
⚠️
Confusing gross and net burn
Gross burn = total spend. Net burn = spend minus revenue. Investors mean net burn when they ask for burn rate.
⚠️
Not starting fundraise with 12+ months runway
Fundraising takes 3-6 months minimum. Starting with 6 months runway means running on fumes during the process.
⚠️
Forgetting committed but unincurred expenses
Large contracts signed but not yet invoiced, upcoming payroll, and deferred vendor payments all affect near-term cash needs.
Frequently Asked Questions
What is the difference between gross and net burn? ▾
Gross burn is total monthly cash outflow. Net burn is cash outflow minus revenue received. Net burn is the true measure of how fast you are consuming your cash reserves.
What is a good runway for a startup? ▾
18-24 months is considered healthy. 12 months minimum to safely fundraise. Under 9 months is crisis territory requiring immediate fundraising or cost cuts.
How do I reduce burn rate quickly? ▾
Three levers: cut payroll (largest expense), reduce vendor/tool costs, and accelerate revenue. Payroll is typically 60-70% of startup burn.
When should I start my next fundraise? ▾
With 12-15 months of runway remaining. Fundraising takes 3-6 months, and you want to close with 9+ months of runway remaining post-close.
What multiple of monthly burn should I raise? ▾
Typically 18-24 months of net burn. Raise more when sentiment is favorable; less when you're close to profitability.