Startups that are not yet profitable watch their burn rate closely. Investors usually want at least 12–18 months of runway, so founders start fundraising well before the cash runs out.
How to use the Burn Rate Calculator
- Cash at the start of the period
- Cash at the end of the period
- Length of the period
- Monthly operating expenses (gross burn)
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the cash balance at the start and end of the period and its length, or your monthly expenses and revenue.
Tips
- Use figures for the same period (a month, a quarter or a year) for every input so ratios compare like with like.
- Track the metric over time – the trend usually tells you more than a single value.
- Compare your result with industry benchmarks, which vary a lot between sectors.
- Treat the result as a starting point for a decision, then check the assumptions behind each input.
Common mistakes to avoid
- Mixing monthly and yearly numbers in the same calculation.
- Using revenue where the formula needs profit (or the other way round).
- Forgetting hidden costs such as taxes, fees, overheads or your own time.
Inputs explained
| Field | What to enter |
|---|---|
| Cash at the start of the period | Amount in your currency |
| Cash at the end of the period | Amount in your currency |
| Length of the period | In months |
| Monthly operating expenses (gross burn) | Amount in your currency |
What each result means
- Net burn rate (per month) = ([Cash at the start of the period] – [Cash at the end of the period])÷[Length of the period]
- Implied monthly revenue = [Monthly operating expenses (gross burn)] – [Net burn rate (per month)]
Example values
How the main result changes when Cash at the start of the period changes and everything else stays at the example values above:
| Cash at the start of the period | Net burn rate (per month) |
|---|---|
| 450,000 | -45,000 |
| 675,000 | -7,500 |
| 900,000 | 30,000 |
| 1,125,000 | 67,500 |
| 1,350,000 | 105,000 |
| 1,800,000 | 180,000 |
Formula
Net burn rate = (starting cash − ending cash) ÷ monthsGross burn = monthly operating expensesRunway = cash in the bank ÷ net burn rateWorked example
Inputs — Cash at the start of the period: $900,000; Cash at the end of the period: $720,000; Length of the period: 6 months; Monthly operating expenses (gross burn): $55,000.
Results — Net burn rate (per month) = $30,000.00; Gross burn rate (per month) = $55,000.00; Implied monthly revenue = $25,000.00; Cash runway = 24 months; Cash runs out (from today) = Tue, October 24, 2028.
Frequently asked questions
What is a good burn rate?
One that leaves at least 12–18 months of runway at the current cash level.
What is the difference between gross and net burn?
Gross burn is total spending; net burn is spending minus revenue.
How do I extend my runway?
Cut costs, raise prices, increase revenue or raise more capital.
What formula does the Burn Rate Calculator use?
Net burn rate = (starting cash − ending cash) ÷ months.