Burn Rate Calculator
Calculate your startup’s gross and net burn rate, plus how many months of runway you have left.
Total monthly operating expenses
Monthly recurring revenue (if any)
Current cash balance available
Enter your expenses and cash, then click Calculate.
How Burn Rate Calculation Works
What is Burn Rate?
Burn rate measures how quickly a startup consumes its cash reserves. It is one of the most important metrics for early-stage companies because it directly determines how long the company can survive before needing additional funding or reaching profitability.
Gross vs Net Burn Rate
Gross burn rate is simply your total monthly operating expenses. It includes salaries, rent, software, marketing, and every other cost. Net burn rate accounts for revenue by subtracting monthly income from monthly expenses. A company spending $150K/month with $50K in revenue has a gross burn of $150K and a net burn of $100K.
Calculating Runway
Runway is how many months your company can operate before running out of cash. It is calculated by dividing your current cash balance by your net burn rate. If you have $1.2M in the bank and a net burn of $100K/month, you have 12 months of runway.
Why Burn Rate Matters
Investors closely examine burn rate when evaluating startups. A high burn rate without corresponding growth signals poor capital efficiency. Most venture-backed startups aim for 18 to 24 months of runway after each funding round. This gives enough time to hit milestones and raise the next round without desperation.
Managing Your Burn
Track your burn rate monthly. Compare it to your plan and adjust quickly if expenses are growing faster than expected. Many successful startups maintain a "default alive" posture, meaning their revenue growth trajectory will cover expenses before cash runs out.