About

Burn rate quantifies the speed at which a company depletes its cash reserves before generating positive cash flow. Two distinct metrics exist: Gross Burn measures total monthly operating expenditure regardless of income, while Net Burn subtracts monthly revenue to reveal the actual cash drain per period. A miscalculated runway leads to one outcome: the company runs out of money before its next funding round closes. This calculator computes both rates, derives your remaining runway in months, and projects the exact calendar date your balance reaches zero under current conditions.

The model assumes linear cash depletion with constant monthly expenses and revenue. Real-world variance from seasonality, one-time costs, or revenue spikes means you should re-run this calculation monthly. The tool also flags runway health: fewer than 6 months signals immediate fundraising urgency per standard VC benchmarks. Pro tip: most Series A processes take 3 - 6 months from first meeting to wire, so begin well before your projected zero-cash date.

Formulas

The gross burn rate represents total outflows per month regardless of revenue:

Gross Burn = n∑i=1 E_i

Net burn rate accounts for incoming revenue, revealing the true monthly cash drain:

Net Burn = Gross Burn − R

Cash runway tells you how many months remain before funds are exhausted:

Runway = CNet Burn

The projected zero-cash date extends runway from today:

Zero Date = Today + Runway months

Where E_i = individual expense line item, n = number of expense categories, R = monthly recurring revenue, and C = current cash balance. When Net Burn ≤ 0, the company is cash-flow positive and runway is theoretically infinite.

Reference Data

Runway Range	Health Status	Recommended Action	Typical Stage
> 24 months	Excellent	Focus on growth. Consider strategic hiring.	Post-Series B+
18 - 24 months	Strong	Maintain course. Begin long-term planning.	Post-Series A
12 - 18 months	Healthy	Ideal fundraising position. Start outreach.	Seed / Series A
9 - 12 months	Caution	Initiate fundraise immediately or cut costs.	Late Seed
6 - 9 months	Warning	Aggressive cost reduction. Bridge round needed.	Pre-Seed / Bridge
3 - 6 months	Critical	Emergency measures. Layoffs or pivot likely.	Distressed
< 3 months	Terminal	Wind-down or emergency acquisition discussions.	Shutdown risk
Common Monthly Expense Benchmarks (US Startups)
Salaries & Benefits	60 - 75% of total burn for software companies
Cloud Infrastructure	5 - 15% depending on stage and product type
Office & Facilities	5 - 10% (lower for remote-first companies)
Marketing & Sales	10 - 20% for B2B SaaS; higher for B2C
Legal & Accounting	1 - 3% of monthly operating budget
Insurance	1 - 2% varies by headcount and coverage
Travel & Misc	2 - 5% higher for enterprise sales teams

Frequently Asked Questions

Gross burn rate is the total amount of cash your company spends each month on all operating expenses combined - salaries, rent, software, marketing, and everything else. Net burn rate subtracts your monthly revenue from that total. For example, if you spend $150,000/month and earn $40,000/month, your gross burn is $150,000 and your net burn is $110,000. Investors typically ask about net burn because it reflects actual cash depletion speed.

This calculator assumes constant monthly revenue and expenses, producing a linear runway projection. If your revenue fluctuates seasonally (e.g., e-commerce peaks in Q4), the actual runway may be shorter during low-revenue months and longer during peaks. For volatile revenue, run the calculator with your worst-month revenue figure to get a conservative estimate, then separately with your average to get a baseline. The conservative number should drive fundraising decisions.

Most VCs expect a startup to have 12-18 months of runway post-investment. When evaluating a company for funding, they want to see at least 6 months remaining so the founders are not negotiating from desperation. The fundraising process itself (Series A) typically takes 3-6 months from first pitch to money in the bank. Therefore, begin fundraising when you have at least 9-12 months of runway remaining.

One-time expenses (equipment purchases, security deposits, legal fees for incorporation) should generally be excluded from your monthly burn rate calculation because they distort the ongoing operating cost. However, if you have a series of large one-time costs planned (e.g., office buildout over 3 months), temporarily add them to get a realistic short-term runway. This calculator allows you to add and remove expense lines, so model both scenarios.

A negative net burn rate means your monthly revenue exceeds your monthly expenses - the company is cash-flow positive. In this state, your cash balance grows each month and the runway is effectively infinite. The calculator will display this as unlimited runway. Note that cash-flow positive does not mean profitable in an accounting sense (which includes depreciation, amortization, and accrued liabilities), but it does mean you are not depleting your reserves.

Recalculate monthly at minimum, ideally as part of your monthly financial close process. Any event that materially changes expenses (new hire, office lease, major contract) or revenue (lost client, new deal) should trigger an immediate recalculation. Many CFOs track a 3-month rolling average burn rate to smooth out short-term spikes and get a more reliable runway estimate.