Burn Rate Calculator
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Burn rate is the speed at which a startup or business spends its cash reserves. Gross burn is total monthly spending; net burn is spending minus revenue. Runway = Cash reserves ÷ Net burn rate.
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Tip: Target 18+ months of runway after any fundraise. It takes 6–9 months to close a round, so 18 months gives you one chance to fundraise comfortably.
- 1Add up all monthly outgoings (salaries, rent, servers, marketing, etc.) — this is gross burn
- 2Subtract monthly revenue — this gives net burn rate
- 3Divide remaining cash by net burn to find runway in months
Cash $500k · Gross burn $80k · Revenue $20k=8.3 months runwayNet burn $60k → $500k ÷ $60k
Cash $1M · Net burn $100k=10 months runwayTime to raise or reach break-even
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Fun Fact
Paul Graham of Y Combinator recommends founders always know their runway to the day — it is the single most important metric for survival.
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