Calculate your startup's burn rate, cash runway, and funding needs. Includes gross and net burn analysis, funding scenario planning, and stage-appropriate benchmarks from pre-seed to Series B+.
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Burn rate is one of the most critical metrics for startups—it determines how long your company can survive before running out of cash. Our free burn rate calculator helps you compute gross and net burn, project your cash runway, and plan funding scenarios. Whether you're a bootstrapped founder watching every dollar or a Series B company planning your next raise, understanding your burn rate is essential for survival and strategic planning. Enter your monthly expenses, revenue, and cash position to get instant insights.
Burn rate measures how quickly a company spends its cash reserves. There are two types: Gross burn rate is your total monthly operating expenses regardless of revenue. Net burn rate accounts for revenue, showing the actual cash you lose each month. For example, if you spend $100,000 per month and earn $30,000 in revenue, your gross burn is $100K and net burn is $70K. Cash runway is how long your current cash will last at your current burn rate.
Burn Rate Formulas
Gross Burn = Monthly Operating Expenses
Net Burn = Monthly Expenses - Monthly Revenue
Runway (months) = Current Cash / Net Burn RateRunway tells you exactly how many months until you run out of cash. This single metric drives critical decisions about fundraising timing, hiring, and spending.
Start raising when you have 9-12 months of runway. Fundraising typically takes 3-6 months, so starting too late puts you in a desperate position.
Tracking burn rate monthly helps you catch spending creep early and make adjustments before cash becomes critical.
Each hire increases burn rate. Understanding the runway impact helps you make informed decisions about team growth.
Investors expect founders to know their burn rate cold. It's one of the first questions in any fundraising conversation.
Net burn shows how revenue reduces cash consumption. Use it to set targets for reaching cash-flow positive.
Model how different funding amounts impact your runway to negotiate raises that give you adequate time to hit milestones.
Calculate burn rate monthly to track spending trends and catch issues early. Compare to budget and previous months.
Know your exact burn rate and runway before investor meetings. Model how much you need to raise for 18-24 months runway.
Model the runway impact of new hires including salary, benefits, equipment, and overhead before committing.
Present burn rate trends and runway projections to your board with clear plans for reaching profitability or next raise.
Recalculate runway with new cash and planned post-funding burn rate to set realistic milestones.
When fundraising becomes harder, extend runway by cutting burn. Model different cost-cutting scenarios.
There's no universal 'good' burn rate—it depends on your stage, funding, and growth goals. Pre-seed startups typically burn $15-50K/month, seed-stage $50-150K, Series A $200-500K, and Series B+ $500K-2M+. The key is having enough runway (12-18 months) and burn that's justified by growth.
Gross burn rate is your total monthly operating expenses, regardless of revenue. Net burn rate subtracts revenue from expenses, showing actual cash consumption. If you spend $100K and earn $40K, gross burn is $100K and net burn is $60K. Most investors focus on net burn.
Aim for 18-24 months of runway after closing funding. At minimum, maintain 12 months. When runway drops to 9 months, start fundraising immediately since raises typically take 3-6 months. Less than 6 months is danger zone.
Cash Runway (months) = Current Cash Balance / Monthly Net Burn Rate. For example, with $1.2M cash and $100K net burn, runway is 12 months. Use net burn (not gross) to account for revenue offsetting expenses.
Start fundraising when you have 9-12 months of runway. This gives you 3-6 months to close a round without becoming desperate. Raising from strength (with runway) gets better terms than raising from weakness.
Include all regular operating expenses: salaries, benefits, rent, software/tools, marketing, legal, accounting, insurance, equipment, travel, and any other recurring costs. Exclude one-time capital expenditures and funding closing costs.
Calculate burn rate monthly at minimum. Some founders track weekly, especially when cash is tight. Regular tracking helps you spot trends—increasing burn should trigger review, decreasing burn shows efficiency gains.
A negative burn rate means you're cash-flow positive—revenue exceeds expenses! This is the goal. You're generating cash rather than consuming it. Companies with negative burn rate have infinite runway from operations.
Biggest levers: delay or cancel hires, reduce salaries (including founders), cut marketing spend, negotiate lower rent or go remote, eliminate non-essential software, and pause travel. Layoffs are painful but fastest for major reduction.
Yes, always include founder salaries. Even if founders take below-market salaries, include the actual amount paid. This gives an accurate picture of cash consumption. You can separately track 'normalized' burn with market salaries for comparison.
Burn multiple = Net Burn / Net New ARR. A burn multiple under 1 is excellent (you're adding more revenue than you're burning). 1-2 is good for growth stage. Above 2 suggests inefficient growth. This metric is especially important for Series A+ companies.
Both measure efficiency. Burn rate focuses on cash consumption; Magic Number focuses on S&M efficiency specifically. A company can have high burn but good Magic Number if the burn is in R&D rather than inefficient S&M. Use both for complete picture.
Zero cash date is when your cash balance will hit zero at current burn rate: Current Date + (Cash Balance / Monthly Net Burn). This date should always be on your radar. It's the ultimate deadline for either reaching profitability or raising funds.
Raise enough for 18-24 months of post-funding burn. If you plan to increase spending after raising, use your projected post-funding burn rate, not current burn. Add 10-20% buffer for unexpected expenses. Account for closing costs (legal, etc.).
Options when cash runs out: emergency bridge financing (often on bad terms), acqui-hire, asset sale, or shutdown. None are good. This is why monitoring runway and raising with time to spare is critical. Running out of cash is the #1 startup killer.