Burn Rate Calculator
Calculate your startup's gross and net burn — from historical cash change or current revenue and expenses — plus annualized burn and an estimated runway.
Written by the CalcBundle Research & Editorial Team · Reviewed by the Quality Review Team · Transparent formulas · results are estimates, not advice. · Updated
Net monthly burn
Enter your monthly expenses (greater than zero).
What is a burn rate calculator?
Burn rate is how fast your startup spends cash. This calculator computes both gross burn (total monthly spend) and net burn (spend minus revenue), annualizes them, and — if you provide a cash balance — estimates your runway.
Two ways to calculate burn
- Historical burn = (Starting cash − Ending cash) ÷ months in the period. Best when you have real bank balances over time.
- Current burn: gross burn = monthly expenses; net burn = expenses − revenue. Best for a forward-looking monthly view.
Gross vs net burn
Gross burn tells you your cost base; net burn tells you how fast your cash is actually falling. A company with high revenue can have a large gross burn but a small net burn. Runway depends on net burn.
A note on cash vs revenue
Burn is about cash. If customers pay slowly, recognised revenue can overstate the cash actually coming in. For an accurate picture, use cash receipts, and model timing with the cash flow calculator.
Why founders and investors watch burn so closely
Burn rate is, in the end, a clock. It converts an abstract cash balance into the concrete question every founder must answer: how long do we have, and what must we achieve before the money runs out? Investors read it as a signal of discipline and capital efficiency — a company burning fast without commensurate growth raises red flags, while one growing quickly on a controlled burn signals a team that spends wisely. Watching net burn month to month is often the earliest warning that costs are creeping up or that revenue is not converting to cash as planned, which is why it belongs at the top of any startup dashboard.
Worked example
If your cash balance falls from $500,000 to $350,000 over six months, your average monthly net burn is ($500,000 − $350,000) ÷ 6 = $25,000, or $300,000 annualized. With $350,000 still in the bank at that burn, you have roughly 14 months of runway. Trim net burn to $20,000 a month — by lifting revenue or cutting costs — and that runway stretches to about 17.5 months, buying you an extra quarter to hit a milestone or close a round without changing anything else.
Related tools
Turn burn into a timeline with the startup runway calculator, and track profitability with the business profit calculator.
Frequently asked questions
What is the difference between gross burn and net burn?
Gross burn is the total cash your business spends in a month. Net burn subtracts revenue from that spend. Net burn is what actually reduces your cash balance and drives runway.
How do you calculate burn rate?
Two ways. Historical: (starting cash − ending cash) ÷ number of months. Current: monthly expenses (gross burn) minus monthly revenue (net burn). This calculator supports both.
What is a monthly vs annualized burn?
Monthly burn is cash used per month; annualized burn multiplies it by 12 to show the yearly run-rate. Annualized burn is useful when planning fundraises and budgets.
How does burn affect runway?
Runway = current cash ÷ net burn. The higher your net burn, the shorter your runway. Reducing burn is the fastest way to extend how long your cash lasts.
What is a healthy burn rate for a startup?
There is no single healthy number, because it depends entirely on your stage, cash balance and growth. The more useful lens is efficiency: how much growth you are buying with each dollar of net burn, and how many months of runway your burn leaves you. A high burn can be perfectly healthy if it is funding fast, capital-efficient growth and you have plenty of runway; the same burn is dangerous if growth is flat or runway is short. Judge burn against results and runway, not against an arbitrary benchmark.
What is the burn multiple?
The burn multiple is net burn divided by net new annual recurring revenue added over the same period, and it has become a popular gauge of capital efficiency. A lower multiple means you are generating more new revenue for each dollar burned — broadly, under 1 is excellent and above 2–3 suggests inefficient growth. It reframes burn from ‘how much are we spending?’ to ‘how much are we spending to grow?’, which is the question investors increasingly focus on.
Should I reduce burn or raise more money?
It depends on why you are burning and what the cash is buying. If burn is funding genuine, efficient growth and you can raise on good terms, extending the runway through fundraising may be the right call. If growth has stalled or a raise would be expensive or dilutive, cutting burn to reach profitability or a stronger milestone is usually wiser. The two are not mutually exclusive — many companies trim burn first to raise later from a position of strength.
Related calculators
Disclaimer. This calculator provides estimates for informational purposes only. Results are based on the information you enter and the assumptions used by the calculator. Actual financial, tax, business valuation, lending, marketplace or investment outcomes may differ. Consider consulting a qualified professional for decisions involving significant amounts of money. Burn and runway are estimates based on the figures you enter and can change month to month.