What Is Burn Rate?

Burn rate measures how fast a startup or early-stage company is spending its cash reserves. For companies pre-profitability, this is the single most critical financial metric — it determines survival. This burn rate calculator computes your net and gross burn rate, runway in months and weeks, and projects when your cash will run out at current rates.

The Burn Rate Formulas

Gross Burn Rate = Total Monthly Expenses. Net Burn Rate = Monthly Expenses − Monthly Revenue. Runway = Cash Balance ÷ Net Burn Rate. These calculations are essential for investor reporting, board meetings, and fundraising timelines.

Understanding Your Runway

Under 6 months: critical — begin emergency fundraising or cost cuts immediately. 6–12 months: start fundraising now, as it typically takes 3–6 months to close a round. 12–18 months: healthy — begin preparing for the next round. 18+ months: strong position to negotiate favorable terms with investors.

Key Benchmarks by Stage

Pre-seed ($0–$500K raised): Monthly burn typically $5K–$30K. Seed ($500K–$2M): $30K–$100K/month. Series A ($2M–$15M): $100K–$500K/month. Series B+: $500K–$2M+/month. Benchmark your burn against peers and ensure it's tied to proportional growth in key metrics.