Burn Rate Calculator
Watching the Countdown
Burn rate is how fast a company spends down its cash reserves, and it's the number that determines how much time is left before a fundraise, a revenue milestone, or a cost cut becomes non-negotiable. This calculator computes it two ways: from a snapshot of monthly expenses and revenue, or from the actual change in a cash balance over a known period.
The Formula
Gross Burn Rate = Total Monthly Operating Expenses
Net Burn Rate = Monthly Expenses − Monthly Revenue
From cash balance change:
Total Cash Burned = Starting Cash − Ending Cash
Monthly Burn Rate = Total Cash Burned / Months Elapsed
Gross Burn vs. Net Burn
Gross burn is total spend regardless of income; net burn subtracts revenue coming in, which is the number that actually determines how fast cash reserves are shrinking. A company can have a high gross burn but a low, or even negative, net burn if revenue is covering most of its costs.
Where This Calculation Matters
- Fundraising timelines — investors evaluate burn rate alongside runway to gauge how urgently a company needs to close a round.
- Budget discipline — tracking net burn month over month shows whether cost-cutting or revenue growth is actually working.
- Hiring decisions — each new hire's fully loaded cost raises gross burn, which should be weighed against remaining runway.
- Board reporting — burn rate is a standard line item in monthly or quarterly investor updates.
How to Use This Calculator
- Choose From Monthly Expenses & Revenue or From Cash Balance Change from the mode selector.
- For the first mode, enter Monthly Operating Expenses ($) and Monthly Revenue ($).
- For the second mode, enter Starting Cash Balance ($), Ending Cash Balance ($), and Months Elapsed.
- Select Calculate to see the burn rate figure.
Related Calculations
Turn this rate into a countdown with the Startup Runway Calculator, or see the full picture of cash movement with the Cash Flow Calculator.