What is a good burn rate for a startup?

Healthy burn depends on stage and capital raised. Early-stage startups should aim for at least 12–18 months of runway at all times. Series A+ companies often target 18–24 months. The key metric is runway, not absolute burn — a $1M/mo burn is fine with $30M in the bank; $50K/mo burn isn't fine with $200K.

What's the difference between gross burn and net burn?

Gross burn is total monthly cash going out the door (every expense). Net burn is gross burn minus monthly revenue — the cash you're actually losing. A startup making $100K/mo with $150K expenses has $150K gross burn but only $50K net burn. Investors and boards care about net burn.

When should I cut burn?

Cut decisively when runway drops below 12 months and you don't have a clear path to revenue covering the gap or to a new round closing within 6 months. Waiting until 6 months of runway leaves no room to negotiate with investors — they sense desperation and discount valuation.

How do I extend runway?

Three levers, in order of speed: (1) cut discretionary spend (ads, contractors, perks) — instant. (2) Pause hiring or selective layoffs — 1–3 months to take effect. (3) Grow revenue — slowest but most durable. Most failed startups skip step 1 too long.

What is 'default alive' vs 'default dead'?

Paul Graham's framework: at current growth and burn, will you reach profitability before cash runs out? If yes, you're 'default alive' and have leverage with investors. If no, you're 'default dead' and must change something. Combine this with CAC payback math to see which lever — growth or efficiency — to pull.

Burn Rate Calculator — Free Startup Runway Tool (2026)

Free burn rate calculator — calculate monthly burn, cash runway & survival timeline for startups. Essential for founders managing venture capital & seed funding.

Last Updated: March 25, 2026

Cash Balance ($)

Monthly Expenses ($)

Monthly Revenue ($)

Instant Results

20.0 mo

Cash Runway

$40,000

Gross Burn/mo

$25,000

Net Burn/mo

How to Use

Enter your current cash balance (bank + treasury, excluding undrawn credit lines).
Enter total monthly operating expenses (salaries, rent, software, vendors, ad spend).
Enter monthly revenue if you have it — leave at 0 for pre-revenue.
Read your gross burn, net burn, and runway. If runway is under 12 months, understand your customer acquisition costs and audit ad ROAS before raising again.

Formula Explained

Gross Burn = Monthly Expenses Net Burn = Monthly Expenses − Monthly Revenue Runway (months) = Cash Balance / Net Burn

Cash Balance: = Liquid cash in bank accounts and treasury (exclude unsigned credit)
Gross Burn: = Total monthly cash outflow regardless of revenue
Net Burn: = Cash you actually lose each month after revenue is applied

Worked example: $500K cash, $40K monthly expenses, $15K monthly revenue. Net burn = $40K − $15K = $25K/mo. Runway = $500K / $25K = 20 months.

Burn Rate Calculator — Free Startup Runway Tool (2026)

How to Use

Formula Explained

References

Frequently Asked Questions