Burn Rate & Runway Calculator for Startups

Frequently Asked Questions

What is burn rate?

Burn rate is the speed at which a company spends its cash reserves. Gross burn is total monthly cash outflows. Net burn is gross burn minus monthly revenue — the actual cash consumed per month. Investors and founders track net burn because it reflects the true cash drain on the business after revenue offsets some expenses.

What is a good runway for a startup?

Most investors recommend maintaining at least 18–24 months of runway at all times. With 18+ months you have time to hit milestones, run a fundraise process, and handle unexpected setbacks without panic. Below 6 months is a danger zone — fundraising typically takes 3–6 months, so less than 6 months means you're already late.

What is the difference between gross burn and net burn?

Gross burn is your total monthly operating expenses before any revenue. Net burn subtracts monthly revenue from gross burn. If you spend $100,000/month and earn $30,000, your gross burn is $100,000 and your net burn is $70,000. Runway is always calculated from net burn, not gross burn.

How much should I raise relative to my burn rate?

A common heuristic is to raise enough for 18–24 months of runway at your projected burn rate — not your current burn, since headcount and spending usually increase after a raise. Account for a 3–6 month fundraising process in your timing, and plan to start raising when you have 9–12 months of runway remaining.

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