Calculate your startup's monthly burn rate by comparing starting and ending cash balances to track gross and net cash consumption over time.
The Burn Rate Calculator helps founders and finance teams measure how quickly a startup is spending its cash reserves. By comparing your starting cash balance to your ending balance over a defined period, this tool computes both gross burn rate (total cash outflows per month) and net burn rate (outflows minus any revenue), giving you a clear picture of your company's cash consumption trajectory.
Understanding burn rate is essential for every venture-backed startup. Investors will ask about your burn rate in every board meeting, and it directly determines how many months of runway you have left. A rising burn rate without corresponding revenue growth is a red flag, while a declining net burn rate signals progress toward sustainability.
This calculator also shows a month-by-month cash projection so you can visualize exactly when your cash reserves will be depleted if current spending patterns continue. Use it alongside the Runway Calculator and Required Funding Calculator for a complete financial planning picture.
Burn rate is the single most important financial metric for pre-revenue and early-revenue startups. Knowing your exact monthly cash consumption helps you make critical decisions about hiring, marketing spend, and product investment. It also determines when you need to start fundraising — most founders underestimate how long fundraising takes and begin too late. Tracking both gross and net burn separately reveals whether revenue growth is meaningfully offsetting expenses or just creating an illusion of improving economics.
Gross Burn Rate = Total Cash Spent ÷ Number of Months Net Burn Rate = (Starting Cash − Ending Cash) ÷ Number of Months Alternatively: Net Burn = Gross Burn − Monthly Revenue Months of Cash Remaining = Current Cash ÷ Net Burn Rate
Result: $100,000/mo net burn, $130,000/mo gross burn
Starting with $2,000,000 and ending at $1,400,000 after 6 months means the company spent $600,000 total, or $100,000 per month in net burn. If monthly revenue is $30,000, gross burn is $130,000/month ($100,000 net + $30,000 revenue offset). At this net burn rate, the remaining $1,400,000 lasts approximately 14 months.
Burn rate is the vital sign of startup health. Just as a doctor monitors heart rate and blood pressure, founders must monitor burn rate to ensure the company survives long enough to achieve product-market fit and sustainable growth. Running out of cash is the number one reason startups fail, and burn rate is the metric that predicts exactly when that will happen.
Gross burn rate shows total spending and is essential for understanding your cost structure. It tells you how much it costs to keep the lights on regardless of revenue. Net burn rate shows the actual cash drain and is the number you use for runway calculations. As your startup matures, the gap between gross and net burn should narrow as revenue grows.
Cutting burn is not always the right answer. If you're pre-product-market-fit, reducing burn extends your runway to find the right model. But post-product-market-fit, increasing burn to accelerate growth may be the optimal strategy. The key is ensuring each dollar of burn generates measurable progress toward a fundable milestone or sustainable revenue.
The biggest mistake is ignoring burn rate until cash is critically low. By then, your options are limited and negotiating leverage is gone. Other mistakes include confusing GAAP expenses with cash burn (they differ due to accruals, prepayments, and non-cash items) and forgetting to include upcoming one-time costs like annual software renewals or equipment purchases.
Gross burn rate is total monthly cash outflows regardless of revenue. Net burn rate subtracts revenue from gross burn, showing the actual cash decrease per month. For a pre-revenue startup, gross and net burn are the same. As revenue grows, net burn should decline toward zero and eventually become positive (profitability).
Burn rates vary enormously by stage and industry. A pre-seed startup with 2–3 founders might burn $20,000–$50,000/month. A seed-stage startup with 5–10 employees typically burns $80,000–$200,000/month. Series A companies often burn $200,000–$500,000/month. The key is whether the burn rate is proportional to growth.
Calculate burn rate at least monthly, ideally as part of your month-end financial close. Some fast-moving startups track it weekly. The trend matters more than any single data point — a rising burn rate should prompt immediate investigation into what's driving the increase.
For a single month's calculation, yes — include everything. But for trend analysis and runway planning, it's useful to separate recurring burn from one-time costs. Report both: your run-rate burn (recurring only) and your actual burn (including one-time items).
Investors use burn rate to evaluate capital efficiency. A startup burning $200K/month with $50K monthly revenue growth is more attractive than one burning $200K with flat revenue. High burn with slow growth suggests poor unit economics. Low burn with strong growth suggests an efficient operation that deserves more capital.
A negative net burn rate means you're generating more cash than you're spending — you're cash-flow positive. This is the goal for mature companies. For startups, reaching negative net burn (profitability) means you have infinite runway and no longer depend on external funding to survive.