Burn Rate & Runway Calculator

Burn rate is the rate at which a company spends its cash reserves before generating positive cash flow. It's typically measured monthly. Gross burn is total monthly expenses. Net burn is expenses minus revenue. Startups use burn rate to calculate their runway—how long they can operate before running out of cash.

Most investors recommend 12-18 months of runway at any given time. This provides enough time to hit milestones and raise the next funding round. Seed-stage startups should aim for 18+ months. Series A+ companies can operate with 12 months if they have predictable revenue growth.

A "good" burn rate depends on your funding stage and growth goals. Early-stage startups with funding may burn $50K-$500K monthly to achieve growth. The key metric is burn multiple: net burn divided by net new ARR. A burn multiple under 1.5x is considered efficient for growth-stage companies.

Reduce burn by: 1) Cutting non-essential expenses (office space, software tools), 2) Negotiating vendor contracts, 3) Hiring contractors vs full-time employees, 4) Increasing revenue through pricing optimization, 5) Delaying non-critical hires. Focus on cuts that don't impact core product development.

Start worrying when your runway drops below 6 months without a clear path to funding or profitability. Also monitor if your burn rate is increasing faster than revenue. If you're burning more than 10% of your cash monthly without growth to justify it, take immediate action to extend runway.