Burn Rate & Runway Calculator
Calculate your startup's monthly burn rate and see exactly how many months of cash runway you have left. Visualize your cash depletion over time and plan ahead.
Current cash on hand
Total monthly operating costs
Current monthly revenue (optional)
Planning your next fundraise?
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Understanding Burn Rate and Runway
Burn rate and runway are the two most critical financial metrics for any startup. They answer the fundamental question: how long can we keep operating with our current cash? Every founder, CFO, and investor watches these numbers closely.
Gross vs Net Burn Rate
Gross burn rate is your total monthly spending — salaries, rent, tools, marketing, everything. Net burn rate subtracts your monthly revenue from expenses, showing the actual cash consumed. As your revenue grows, the gap between gross and net burn narrows until eventually net burn goes negative — meaning you're profitable.
Why Runway Matters
Runway tells you how many months you can operate before running out of cash. It drives every major decision: when to fundraise, when to hire, when to invest in growth, and when to cut costs. Starting fundraising with less than 6 months of runway puts you in a weak negotiating position, as investors know you have limited alternatives.
Planning Ahead
Use this calculator to model different scenarios. What happens if you cut 20% of expenses? What if revenue grows 10% per month? What if you raise an additional $500K? Running these scenarios helps you make proactive decisions rather than reacting to a cash crisis.
Frequently Asked Questions
- What is burn rate?
- Burn rate is the rate at which a company spends its cash reserves. Gross burn rate is total monthly expenses. Net burn rate is monthly expenses minus monthly revenue — it represents how much cash you actually consume each month. Net burn is the more meaningful metric for calculating runway.
- How do you calculate runway?
- Runway = Cash Balance / Net Monthly Burn Rate. For example, if you have $500,000 in the bank and your net burn is $50,000/month, you have 10 months of runway. This tells you how long you can operate before running out of cash, assuming expenses and revenue stay constant.
- What is a healthy runway for a startup?
- Most investors and advisors recommend maintaining 12-18 months of runway. Less than 6 months is considered critical — you should be actively fundraising or cutting costs. 6-12 months is a caution zone. 18+ months gives you comfortable room to execute your strategy without urgent fundraising pressure.
- What is the difference between gross and net burn rate?
- Gross burn rate is your total monthly expenses regardless of revenue. Net burn rate is expenses minus revenue — the actual cash consumed per month. If you spend $100K/month and earn $30K/month, your gross burn is $100K and your net burn is $70K. Net burn is what determines your actual runway.
- How can I extend my runway?
- You can extend runway by: (1) increasing revenue (faster sales, higher prices, better retention), (2) reducing expenses (cut non-essential spending, negotiate better rates, defer hires), (3) raising additional funding, or (4) combining all three. The best approach depends on your growth stage and market conditions.