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Net Burn Rate Calculator
Understand your company’s financial sustainability by calculating your net burn rate and runway.
Calculate Burn Rate & Runway
What is Net Burn Rate?
Net Burn Rate is the amount of cash a company loses in a given period after accounting for incoming revenue. It’s a critical metric for understanding how long your business can operate before needing additional funding.
The Formulas
Net Burn = (Starting Cash – Ending Cash) ÷ Period
Runway = Current Cash ÷ Net Burn
Gross Burn is your total monthly expenses. Net Burn is expenses minus revenue—your actual cash loss.
Example Calculation
6-Month Period
Starting Cash: $500,000
Ending Cash: $400,000
Cash Burned: $100,000
Period: 6 months
Net Burn Rate: $100,000 ÷ 6 = $16,667/month
Runway: $400,000 ÷ $16,667 = 24 months
Understanding Your Results
18+ Months Runway
Healthy position. Time to focus on growth and optimization.
12-18 Months Runway
Standard for funded startups. Begin planning next raise at 12 months.
6-12 Months Runway
Concerning. Reduce burn or accelerate fundraising immediately.
< 6 Months Runway
Critical. Emergency fundraising or drastic cost reduction needed.
Investor Expectations
Most investors expect to see 12–18 months of runway at minimum when you begin fundraising. This gives you enough time to:
Complete a full fundraising cycle (typically 3-6 months)
Negotiate from a position of strength, not desperation
Hit milestones that increase valuation before raising
Positive Burn Rate
If your revenue exceeds expenses, you have negative burn (positive cash flow). This is ideal and means you’re self-sustaining!
Profitable Scenario
Starting Cash: $100,000
Ending Cash: $150,000
Period: 6 months
Net Burn: ($100,000 – $150,000) ÷ 6 = -$8,333/month
You’re adding $8,333/month—your business is cash flow positive!
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