Burn Rate Calculator
Work out your startup gross and net monthly burn rate, how many months of cash runway you have left, the projected cash-out date, and your burn multiple. Pick the cash-balance method (start vs end cash) or the budget method (monthly expenses, revenue and growth), and the calculator shows its work.
Formula
Worked example
A startup spends $120,000 a month and earns $45,000, so gross burn is $120,000 and net burn is 120,000 - 45,000 = $75,000 per month. With $750,000 in the bank, runway = 750,000 / 75,000 = 10 months, putting the cash-out date around April 2027. If it added $300,000 of net new ARR over that month, the burn multiple is 75,000 / 300,000 = 0.25x.
Gross burn, net burn and runway
Gross burn is the total cash a company spends each month, every dollar going out the door for payroll, rent, software and marketing. Net burn subtracts the revenue coming in, so it reflects how fast your cash reserves actually shrink. A business with strong revenue burns far less net than its raw expenses suggest. Runway turns net burn into time: how many months your current balance will last at the present pace. Together they answer the founder question that matters most, how long until the money runs out, and when must I act.
Two ways to measure your burn
This calculator offers two methods. The budget method asks for your monthly expenses, monthly revenue and current cash, then reports gross burn, net burn and runway directly, with an optional month-over-month revenue growth rate that stretches runway as revenue compounds. The cash-balance method derives burn from history instead: it subtracts ending cash from starting cash over a period to find total cash burned, divides by the number of months for an average net burn, and projects runway from your current balance. Use the budget method for forward planning and the cash method to sanity-check it against what actually left your bank account.
The burn multiple and why investors watch it
Runway dictates fundraising timing, hiring plans and how aggressively you can experiment. Investors routinely ask for burn and runway because a company that waits until two months of cash remain has little negotiating power. The burn multiple, net burn divided by net new annual recurring revenue, measures capital efficiency: below 1x is excellent, 1x to 1.5x is a healthy Series A range, 1.5x to 2x is acceptable, and above 2x signals heavy spending per dollar of new revenue. A widely used rule of thumb is to begin a raise with nine to twelve months of runway left and to target twenty-four or more months of cash after closing, since fundraising itself often takes longer than expected. Because burn shifts with every new hire, contract or revenue change, recompute it at the close of each month.
Runway and burn multiple health guide
| Metric | Reading | What it suggests |
|---|---|---|
| Runway under 6 months | Critical | Raise or cut costs immediately |
| Runway 6-12 months | Tight | Open fundraising conversations now |
| Runway 12-18 months | Healthy | Execute and monitor burn monthly |
| Runway over 18 months | Comfortable | Invest in growth with a buffer |
| Burn multiple under 1x | Excellent | Highly capital efficient |
| Burn multiple over 2x | Watch | Spending heavily per dollar of new ARR |
Common interpretations of net cash runway and the burn multiple for an early-stage startup.
Frequently asked questions
What is the difference between gross burn and net burn?
Gross burn is your total monthly operating cash outflow, everything you spend. Net burn subtracts any revenue from that, so it reflects how fast your cash reserves actually shrink. In budget mode this calculator shows both: gross burn equals your expenses, and net burn equals expenses minus revenue. In cash mode it reports net burn, since that is what the change in your bank balance captures.
How many months of runway should a startup have?
A common guideline is to begin fundraising with at least 9 to 12 months of runway still in the bank. After closing a round many founders now target 24 months or more of cash, since raising capital in 2025 and 2026 often takes longer than planned and you want room to hit the next milestone before going back to investors.
What is a burn multiple and what is a good number?
The burn multiple is net burn divided by net new annual recurring revenue (ARR) added over the same period. It measures how much cash you burn for each dollar of new recurring revenue. Below 1x is excellent, 1x to 1.5x is a strong Series A range, 1.5x to 2x is acceptable, and above 2x suggests you are spending heavily relative to the revenue you are adding.
What if my revenue is higher than my expenses?
Then your net burn is zero or negative, meaning you are cash-flow positive and adding cash rather than depleting it. The calculator reports unlimited runway and no cash-out date in that case rather than a misleading negative figure. Keep monitoring monthly, as a single large invoice or a revenue dip can flip the trend.