Burn rate is how much cash your startup spends each month. Gross burn is total expenses. Net burn is expenses minus revenue. For example, $100K expenses with $40K revenue = $60K net burn.

What is the difference between gross and net burn?

Gross burn is total monthly expenses regardless of revenue. Net burn is gross burn minus monthly revenue — the actual cash you're consuming. Net burn is more useful for runway calculations.

What is a healthy burn rate?

Healthy burn depends on stage and funding. Generally, aim for 18-24 months of runway. A seed startup with $1M raised should burn around $40-50K/month. The key is burn rate relative to growth rate.

How do I calculate runway from burn rate?

Runway = Cash Balance / Net Burn Rate. With $500K cash and $50K net burn, you have 10 months of runway. Factor in revenue growth for a more accurate projection.

How can I reduce my burn rate?

Key strategies: (1) Defer hiring until essential, (2) Negotiate vendor contracts and payment terms, (3) Use remote work to reduce office costs, (4) Focus on revenue to offset burn, (5) Cut non-essential tools and subscriptions.

Burn Rate Calculator

Calculate your startup burn rate instantly. See gross vs net burn, runway, and get AI-powered recommendations to optimize spending.

Enter Your Values

Monthly Operating Expenses*

Total monthly costs: payroll, rent, software, marketing, etc.

Monthly Revenue*

Monthly recurring revenue. Enter 0 if pre-revenue.

Current Cash Balance

Total cash in bank accounts right now

Team Size

employees

For burn per employee calculation

Monthly Revenue Growth

Expected MoM revenue growth for projections

Formula

Net Burn Rate = Monthly Expenses - Monthly Revenue

Burn rate is how much cash you spend each month. Net burn accounts for revenue, giving a true picture of cash consumption.

Net Monthly Burn Rate$30,000

Moderate burn of $30,000/month. Revenue offsets 40% of costs.

Gross Burn Rate$50,000

Monthly Revenue$20,000

Revenue Coverage40%

Burn/Employee$5,000

Revenue/Employee$2,000

Cash Balance$500,000

Runway16.7 months

Months to Profitability10 months

Annual Net Burn$360,000

Burn Rate Health Indicators

Cash Flow PositiveRevenue exceeds expenses — sustainable

< -$1

Break-EvenRevenue equals expenses

$0 – $0

Low BurnManageable burn with revenue coverage

$1 – $10,000

Moderate BurnTypical for early-stage with funding

$10,001 – $50,000

High BurnEnsure adequate runway and path to profitability

> $50,001

Source: Startup Finance Best Practices

How to Calculate Burn Rate

Enter your total monthly operating expenses
Enter your monthly revenue (0 if pre-revenue)
Optionally add cash balance for runway calculation
Add team size for per-employee metrics
Add revenue growth rate for projections
Chat with our AI Finance Analyst for optimization strategies

Burn Rate Benchmarks

$20-40K/month

Pre-Seed Burn

$40-80K/month

Seed Stage Burn

$100-200K/month

Series A Burn

18-24 months

Ideal Runway

12 months

Minimum Safe Runway

Source: Carta & Pilot 2024