Finance tools
Burn rate calculator
Free burn rate calculator, cash burn rate calculator, and startup runway calculator for founders and finance teams. Enter cash balances or monthly cash in/out to see net burn, gross burn, cash runway, zero-cash date, and raise-by date using the standard monthly burn rate formula. This measures startup cash burn — not calorie or fitness burn rate — then export CSV or PDF.
What this burn rate calculator does
This startup burn rate calculator shows how fast your company spends cash each month and how many months of runway remain. Use Cash balance mode when you know starting and ending bank balances over a period — the same three-field pattern most fintech calculators use. Use Monthly flows when you track average cash in and cash out separately for gross vs net burn.
Unlike thin SERP calculators that stop at one number, you get runway verdicts, fundraising dates, formula cards, and export — built for founders and finance leads, not fitness tracking.
Net & gross burn
Balance method for net burn; flows mode adds gross burn ($/mo out).
Cash runway
Months until cash runs out at current net burn — plus zero-cash and raise-by dates.
Runway verdict
Healthy, watch, caution, or critical — with plain-language guidance.
CSV/PDF export
Download inputs and results for board decks or Excel models.
Related finance tools: break-even calculator, churn rate calculator, current ratio calculator, and quick ratio calculator.
Monthly burn rate formula
The standard monthly burn rate formula from bank balances is:
Net burn = (Starting cash − Ending cash) ÷ Number of months
Worked example: You started with $10,000 and ended with $2,000 after six months. Net burn = ($10,000 − $2,000) ÷ 6 = $1,333 per month. Runway on $2,000 remaining ≈ 1.5 months — a common burn rate example for early-stage planning.
Enter starting and ending cash
Use bank balances at the start and end of the same period — typically three to six months for a stable average.
Enter the number of months
Divide the cash change by months to get average net burn per month.
Read net burn and runway
Runway = cash on hand ÷ net burn when net burn is positive. Results update live.
Gross vs net burn rate
Gross burn is total cash out each month — payroll, rent, software, contractors. Net burn subtracts cash coming in: Net burn = Gross burn − Monthly cash in.
SaaS example: $250,000/mo out and $100,000/mo in → gross burn $250,000, net burn $150,000. With $1.2M in the bank, runway = $1.2M ÷ $150k = 8 months — the same math our Monthly flows mode uses live.
Investors usually focus on net burn because it reflects how long cash actually lasts after revenue. Gross burn shows operating scale before inflows. Avoid percentage-only gross-burn shortcuts; use dollars per month for board-ready numbers.
Startup runway calculator: cash runway explained
Cash runway — what many founders search as a startup runway calculator — is how many months your current cash lasts at your net burn rate:
Runway (months) = Cash on hand ÷ Net burn per month
Add runway to today's date to estimate your zero-cash date. Subtract your fundraise lead time (often six months) to get a raise-by date — when to start investor conversations before cash gets tight. Many fintech tools stop at months; this calculator turns runway into actionable dates.
What is a good burn rate?
There is no universal "good" burn rate in dollars — what matters is burn relative to growth and runway. Common planning targets after a raise:
- Seed: aim for ~24 months of runway while the next milestone is unproven
- Series A/B: often 18–24 months; trim toward 12–18 only when profitability or the next round is visible
- Below 12 months: fundraising competes with running the company — many investors treat sub-six-month runway as urgent
Growth-adjusted teams also track burn multiple (net burn ÷ net new ARR). Under ~1.5× is often considered efficient for SaaS; above 2× means you may be overpaying for each dollar of growth. That ratio is on our v1.1 roadmap; runway length remains the calculator's primary verdict today.
High burn can be healthy when growth justifies it; dangerous when revenue is flat. The calculator's verdict uses runway length as a practical signal.
How to reduce burn rate
Cut spend that is not driving growth — do not gut the engine that produces revenue. Typical levers:
- Pace hiring — payroll is usually the largest line
- Split fixed vs variable costs — rent and core payroll are harder to cut quickly; marketing, travel, and contractors flex faster in a downturn
- Trim discretionary spend — events, unused SaaS seats, duplicate tooling
- Renegotiate vendors before contracts auto-renew
- Lift cash in — collections, annual prepay, pricing where you have power
For unit-level profitability (different question), use our break-even calculator.
Burn rate in Excel
In a spreadsheet, if starting cash is in A2, ending cash in B2, and months in C2:
Net burn = (A2 − B2) / C2
For monthly flows with cash in D2 and cash out in E2: Net burn = E2 − D2. Runway: = Cash / Net burn.
Export CSV from this calculator to paste into your model, or use PDF for investor updates.
How to calculate burn rate from financial statements
You do not need a dedicated tool on your P&L — burn rate comes from cash, not accrual profit. Two practical paths:
- Bank balance method (fastest): Take opening and closing cash from your bank statements over 3–6 months. Apply (Start − End) ÷ Months — our Cash balance mode.
- Cash flow statement: Sum operating and investing cash outflows for a month (payroll, rent, capex). Subtract operating cash inflows (customer collections, not booked revenue). That yields gross and net burn — our Monthly flows mode.
Accrual revenue on the income statement can diverge from cash collected. For runway and fundraising, investors care about cash in the bank. Use a trailing three-month average so one large invoice does not distort net burn.
How investors use burn rate
Venture investors use burn rate and runway to answer one question: how long until you need more capital, and will metrics justify it? They typically review:
- Net burn trend — is spending discipline improving quarter over quarter?
- Runway at close — many funds expect 18–24 months after a round
- Efficiency vs growth — burn multiple and unit economics, not burn dollars alone
- Default alive status — can the company reach breakeven on existing cash if fundraising stalls?
Export CSV or PDF from this calculator for board prep. Pair with our churn rate calculator for SaaS retention context — customer churn and cash burn measure different risks.
Default alive vs default dead
Paul Graham framing
Default alive means that at current growth, you reach profitability on cash you have. Default dead means you need a raise to survive. Paul Graham's fatal pinch is the dangerous combo: default dead, slow growth, and runway too short to fix either. If your verdict reads caution or critical, prioritize lifting growth or cutting net burn — not polishing the pitch deck alone.
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Frequently asked questions about burn rate and cash runway
How do you calculate burn rate?
Net burn = (Starting cash − Ending cash) ÷ Number of months. For ongoing flows: Net burn = Monthly cash out − Monthly cash in. Gross burn is total cash out before subtracting revenue.
What is the difference between gross and net burn rate?
Gross burn is total monthly cash spend. Net burn subtracts cash coming in. Net burn shows how long cash actually lasts — investors usually focus on it.
What is cash runway?
Cash runway = Cash on hand ÷ Net burn per month. It is the number of months until you run out of cash at the current spending rate, assuming no new funding.
What is a good burn rate for startups?
There is no single dollar amount — context matters. Many teams target 18–24 months of runway after a raise. High burn is acceptable when growth justifies it; dangerous when revenue is flat.
How much runway should I have before raising?
Start fundraising about six months before your zero-cash date. In practice, open the round with 12–18 months of runway left so you negotiate from strength.
Can a company have a negative burn rate?
Yes. When cash in exceeds cash out, net burn is negative — you are cash-flow positive. Runway is no longer the constraint; growth and reinvestment are.
How do I reduce my burn rate?
Pace hiring first, then trim discretionary and tooling spend, and lift cash in through collections and pricing. Do not cut spend that is clearly producing growth.
How is burn rate different from break-even?
Burn rate measures how fast you spend cash (runway). Break-even is the sales volume where revenue covers costs. You can be pre-revenue with high burn but still model break-even for pricing.
How do I calculate burn rate in Excel?
Use =(Start−End)/Months for balance method, or =CashOut−CashIn for flows. Runway: =Cash/NetBurn. Export CSV from this calculator to seed your sheet.
How do you calculate burn rate from financial statements?
Use cash, not accrual profit. Either compare opening and closing bank balances over several months, or sum monthly operating cash out minus cash in from your cash flow statement. A trailing 3-month average smooths lumpy collections.
How do investors use burn rate?
Investors estimate runway, burn trend, and whether you are default alive on current cash. Short runway with flat growth signals fundraising urgency; improving net burn with strong growth can support higher spend.
Is this a calorie burn rate calculator?
No. This tool calculates startup and business cash burn — how fast a company spends its bank balance. It is not for fitness, calories, or personal metabolism.