Burn Rate Calculator
MarketingCalculate your startup's gross burn, net burn, and cash runway in months. Free tool for founders to plan fundraising timelines and spending decisions.
Runway (Months)
8.33
Gross Burn Rate (Monthly)
$80,000
Net Burn Rate (Monthly)
$60,000
What is a Burn Rate?
The Burn Rate Calculator estimates how quickly a startup or early-stage company is spending its cash reserves, and how many months of runway remain at the current rate. Burn rate is one of the most closely watched metrics for any venture-backed or bootstrapped company that isn't yet profitable, since it directly determines how much time exists before additional funding or a path to profitability becomes urgent.
This calculator distinguishes between gross burn (total monthly expenses) and net burn (expenses minus revenue), since the two tell different stories — a company can have high gross burn but a manageable net burn if revenue is growing quickly. Pair this with the Break-Even Calculator to see what revenue level would eliminate burn entirely, and the CAC Calculator to assess whether spending on growth is translating into efficient customer acquisition.
How to use this Burn Rate calculator
- Enter your Current Cash Balance — your total available cash, including bank accounts and short-term investments.
- Enter your Monthly Operating Expenses — your typical recurring monthly costs (payroll, rent, tools, marketing).
- Enter your Monthly Revenue — leave at $0 if pre-revenue.
- Review your Runway (Months), the highlighted primary result.
- Check Gross Burn Rate and Net Burn Rate to understand how much revenue is offsetting your spending.
- Adjust expenses or revenue to model the runway impact of a hiring decision, cost cut, or revenue milestone.
Formula & Methodology
Gross Burn = Monthly Operating Expenses Net Burn = Monthly Operating Expenses − Monthly Revenue Runway (Months) = Current Cash Balance ÷ Net Burn If Net Burn is zero or negative (revenue covers or exceeds expenses), runway isn't limited by current burn at all. Example: $500,000 cash balance, $80,000 monthly expenses, $20,000 monthly revenue. Gross burn = $80,000. Net burn = $80,000 − $20,000 = $60,000. Runway = $500,000 ÷ $60,000 ≈ 8.3 months — signaling this company should likely begin fundraising soon, given that a typical raise takes 3-6 months to close.
Frequently Asked Questions
Gross burn is your total monthly operating expenses, regardless of any revenue coming in. Net burn subtracts your monthly revenue from expenses, showing the actual rate at which your cash balance is declining — a company with high gross burn but strong revenue can have a much lower (or even negative) net burn.
A negative net burn rate means your monthly revenue exceeds your monthly expenses — you're cash-flow positive and not burning through your reserves at all. In this case, your cash balance is growing rather than shrinking, and this calculator's runway figure isn't meaningfully limited by current burn.
Most investors and advisors recommend maintaining at least 12-18 months of runway at all times, since fundraising itself typically takes 3-6 months from first pitch to closed round, and you don't want to be raising with under 6 months of cash left. Runway below 6 months is generally considered a red flag requiring immediate action — either fundraising, cutting costs, or both.
No — burn rate is meant to reflect your ongoing, recurring monthly cost structure (salaries, rent, software, marketing), not one-time costs like a major equipment purchase or a one-off legal fee. Including one-time expenses will overstate your burn rate and understate your true runway; track large one-time costs separately.
Most startups recalculate monthly as part of regular financial review, since both expenses and revenue can shift meaningfully month to month, especially during periods of hiring, fundraising, or significant growth or contraction. Recalculating regularly avoids basing fundraising or spending decisions on stale numbers.
No — this calculator uses your current monthly revenue and expenses as flat, unchanging figures for the runway projection, which is a simplification. If you expect revenue to grow meaningfully before your cash runs out, your actual runway will likely be longer than this calculator's straight-line estimate suggests.
The two direct levers are increasing revenue or decreasing expenses — review your largest expense categories for potential cuts, and use the [CAC Calculator](/cac-calculator/) and [Break-Even Calculator](/break-even-calculator/) to assess whether your spending on customer acquisition is efficient relative to the revenue it generates. Extending runway by even a few months can meaningfully change your negotiating position when fundraising.
They're closely related but not always identical — net burn specifically measures the cash impact on your bank balance, while a net loss on an income statement can include non-cash items like depreciation or stock-based compensation that don't actually consume cash. For an early-stage company with few non-cash expenses, the two figures are usually very close.
Investors look at burn rate relative to growth and revenue traction to assess capital efficiency — a high burn rate paired with strong revenue growth is viewed very differently from the same burn rate with flat or declining revenue. They also use your stated runway to estimate how much new capital you'll need and over what timeline, directly informing the size of a funding round.
Indirectly — by understanding your current net burn rate, you can work backward to estimate how much capital is needed to fund 18-24 months of runway at your current or projected spending level. Many founders raise enough to cover at least that buffer, accounting for some expected increase in burn as the company scales post-funding.
Also known as