Free Burn Rate Calculator
Enter your cash position and monthly numbers to get gross burn, net burn, and runway.
* Runway assumes flat spend unless a monthly burn growth rate is entered. Excludes future funding rounds, one-time cash inflows, or debt facilities.
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What Is Burn Rate?
Burn rate is the speed at which a company spends its cash reserves before generating positive cash flow, usually measured per month. It's the single most-watched metric by founders and investors because it directly determines how long a company can survive before it needs to raise again, cut costs, or become profitable.
There are two versions of burn rate that get used interchangeably but mean different things:
- Gross burn rate: total cash going out each month, ignoring revenue
- Net burn rate: cash going out minus cash coming in (revenue), the number that actually determines runway
Burn Rate Formula (Gross vs Net)
Gross burn tells you how expensive the business is to run. Net burn tells you how fast your bank balance is actually shrinking. This is the number that matters for runway. A company can have high gross burn but low (or negative, i.e. cash-flow positive) net burn if revenue is scaling faster than costs.
| Metric | Formula | What It Tells You |
|---|---|---|
| Gross Burn | Total monthly expenses | Total cost to operate the business |
| Net Burn | Expenses − Revenue | Actual monthly cash loss |
| Runway | Cash Balance ÷ Net Burn | Months until cash runs out |
How Runway Is Calculated
Runway is simply how many months of net burn your current cash balance can absorb before hitting zero:
If net burn is $60,000/month and cash balance is $600,000, runway is 10 months. If a company is cash-flow positive (revenue exceeds expenses), net burn is negative and runway is technically infinite, the calculator above flags this automatically.
Burn Rate Benchmarks by Stage
| Stage | Typical Monthly Burn | Target Runway | Team Size |
|---|---|---|---|
| Pre-seed / Idea | $10K–$40K | 12–18 months | 2–5 |
| Seed | $40K–$150K | 18–24 months | 5–15 |
| Series A | $150K–$500K | 18–24 months | 15–50 |
| Series B+ | $500K–$2M+ | 24+ months | 50–200+ |
Benchmarks based on typical SaaS/tech startup spend patterns. Capital-intensive businesses (hardware, biotech) run materially higher burn at every stage.
How to Reduce Burn Rate Without Killing Growth
- Audit payroll first: payroll is typically 60–70% of startup burn. Hiring freezes and role consolidation move the needle fastest.
- Cut tool sprawl: SaaS subscription audits routinely find 10–20% of spend on unused or overlapping tools.
- Renegotiate fixed costs: office leases, vendor contracts, and annual software renewals are almost always negotiable, especially at renewal time.
- Shift variable spend to performance-based: move paid marketing and outbound spend toward channels with measurable payback periods rather than flat retainers.
- Extend runway with revenue, not just cuts: annual pre-pay discounts, upsells to existing customers, and faster collections all reduce net burn without touching headcount.
Frequently Asked Questions
What is burn rate?
Burn rate is the rate at which a company spends its cash reserves, typically measured per month. Gross burn rate is total monthly expenses. Net burn rate subtracts monthly revenue from expenses, giving the actual monthly cash loss that determines runway.
How do you calculate burn rate?
Gross burn equals total monthly operating expenses. Net burn equals monthly expenses minus monthly revenue. To find runway, divide your current cash balance by the net burn rate. This gives the number of months of cash remaining at the current spend pace.
What is a good burn rate for a startup?
There's no universal "good" burn rate. It depends on runway and growth. Most investors want to see 18–24 months of runway after a raise, which caps how high monthly burn should be relative to cash in the bank.
What is burn rate in business?
In a business context, burn rate refers specifically to the pace at which a company, usually a pre-profit startup, is spending its cash reserves each month. It's tracked separately from revenue and profit because a company can be growing revenue while still burning cash if expenses are scaling faster.
What does burn rate mean?
Burn rate means how quickly a company is depleting its available cash. A "high burn rate" means cash is being spent fast relative to the balance in the bank; a "low burn rate" means spending is conservative relative to cash on hand.
How are burn rate and runway related?
Runway is the direct output of burn rate: runway in months equals cash balance divided by net burn rate. A lower net burn rate stretches runway further on the same cash balance, which is why reducing burn is usually the fastest lever founders have to extend how long the company can operate before raising again.
