Startup Burn Rate & Runway Calculator

Burn rate is the monthly cash outflow that erodes your balance before reaching profitability. Gross burn is total monthly expenses regardless of revenue. Net burn is expenses minus revenue, and it is the number most VCs focus on because it reflects true cash consumption. A company spending $500K/month while earning $200K in revenue has $300K net burn. Healthy early-stage startups typically target 12-18 months of runway based on their net burn figure.

The standard target is 18-24 months of runway at current net burn. Start fundraising no later than 12 months of remaining runway because raising a round typically takes 3-6 months and the process is exhausting. Below 6 months you are in distress mode, investor leverage flips against you, and valuations compress. If you cannot raise, cut burn aggressively before you cross 9 months of runway remaining. A bridge round, revenue acceleration, or expense reduction is far better than running out of options.

Yes - true burn includes everyone's salary at market rates. Some founders defer salary to extend runway, but this masks true economics. Investors expect realistic burn modeling that includes all compensation, even if currently deferred or below-market.

In order of impact: layoffs (people are 60-80% of startup costs), reduce contractor spend, renegotiate SaaS tools (often 30-50% savings), pause marketing, downsize office. Avoid cutting product investment - that destroys future revenue and shortens runway long-term.