Cash Burn Rate
Burn rate is how much cash your company spends (net of revenue) each month. It's the speed at which you're depleting your cash reserves, and it directly determines how long you can operate before needing more funding.
Monthly expenses: $150K. Monthly revenue: $80K. Net burn = $150K - $80K = $70K/month.
Burn rate determines your runway, how long you can survive without additional funding. Running out of cash is the #1 way startups die. Understanding and managing burn is existential.
Pre-revenue
Post-product-market-fit
Burn multiple
Gross burn is total monthly cash out (all expenses). Net burn subtracts revenue: Net Burn = Gross Burn - Revenue. Net burn is what matters for runway.
It depends on stage and growth rate. Early stage might burn 80-100% of investment seeking product-market fit. Post-PMF, efficient growth means burning $1-2 for every $1 of new ARR.
Cut discretionary spend first (tools, contractors, perks). Then optimize headcount efficiency. Finally, renegotiate contracts and extend payment terms. But don't cut so deep you can't grow.
We build real-time dashboards that track Burn Rate and every other metric investors care about. Updated daily. Investor-ready.
