Burn Rate Calculator

Gross burn is the total cash a company spends each month on all costs — salaries, rent, software and everything else — regardless of income. Net burn subtracts any revenue, so it measures the actual monthly decline in the bank balance. This calculator measures net burn, because it works from the real change between your starting and ending cash. Net burn is what truly determines runway, since revenue offsets spending and slows how fast reserves deplete.

Most investors advise keeping at least twelve to eighteen months of runway, because raising a new round typically takes several months and you never want to negotiate while nearly out of cash. Longer runway gives room to hit milestones, weather setbacks and fundraise from a position of strength. As runway falls below six months, urgency rises sharply — it becomes time to either close funding, reach profitability, or reduce burn through cost cuts before the situation becomes critical.

Reduce net burn or raise more cash. On the spending side, the largest lever is usually payroll, followed by marketing, office and software costs, so cutting or slowing hiring extends runway most. On the income side, growing revenue directly offsets burn. Founders often combine measured cost discipline with a focus on the fastest paths to revenue. Every dollar of monthly burn removed adds proportionally to the months of survival the remaining cash provides.

Runway tells investors how long a company can operate before it needs more money, which frames the entire risk of an investment. A startup with ample runway can focus on building and hitting milestones, while one running low is forced to fundraise under pressure, often on worse terms. Investors also watch whether burn is buying real progress. Disciplined burn that steadily advances the business signals a team that can be trusted with additional capital.

A negative burn rate means your ending cash balance was higher than your starting balance — the company generated more cash than it spent over the period and is cash-flow positive. In that case there is no depletion to run out of, so runway is effectively unlimited at the current pace, and this calculator returns no finite runway figure. Reaching sustained negative burn, meaning genuine profitability, is the milestone that removes the fundraising deadline entirely.