Burn Rate & Runway Calculator
Calculate your monthly cash burn rate and startup runway. Enter MRR, expenses, and cash balance — see exactly when your cash runs out. Live chart. No signup.
Last reviewed: March 2026
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Gross Burn
$0
Net Burn
$0
Break-Even Target
✓ Profitable
+$0 surplus /mo
Burn Efficiency
0%
How to Calculate Your Startup Runway
Step 1: Enter your monthly MRR
Monthly Recurring Revenue is the predictable revenue your startup earns each month from subscriptions or recurring contracts. If you have no revenue yet, enter 0. The calculator handles pre-revenue startups.
Step 2: Enter your total monthly expenses (gross burn)
Gross burn is every dollar you spend in a month: salaries, rent, infrastructure (AWS, Vercel), tools, marketing, contractors, and anything else. Be honest — include all expenses, not just the obvious ones. Founders regularly underestimate burn by 15–30%.
Step 3: Enter your current cash balance
Check your business bank account and any invested cash reserves. This is the total amount of money available to your company right now. Do not include credit lines or unclosed funding rounds.
Step 4: Read your runway — and see your cash cliff
The calculator shows your runway in months, your net burn rate, and projects your cash balance month-by-month on a live chart. The red cliff marker shows the exact month your cash hits zero. Use the burn reduction slider to simulate cuts, or the “What if I raise?” slider to model a fundraise.
Burn Rate Definition & Formula
What does burn rate mean? Burn rate is the speed at which a company spends its cash reserves before reaching profitability. In startup finance, it measures how fast your monthly cash burn depletes your bank account. There are two types every founder must understand:
Gross Burn Rate
Gross Burn = Total Monthly Expenses
Everything you spend each month, regardless of revenue.
Net Burn Rate
Net Burn = Gross Burn − Monthly Revenue (MRR)
The actual cash leaving your bank account each month.
Runway
Runway (months) = Cash Balance ÷ Net Burn
How many months you can operate at the current burn rate.
Example: Your startup has $600,000 in the bank, $120,000 in monthly expenses, and $40,000 MRR. Net burn = $120,000 − $40,000 = $80,000/month. Runway = $600,000 ÷ $80,000 = 7.5 months.
Net Burn vs. Gross Burn — What's the Difference?
Investors ask about both — and they mean very different things. Gross burn tells them your cost structure. Net burn tells them how fast their money is leaving.
If you quote gross burn when an investor asks for net burn, you'll appear to have less runway than you do. If you quote net burn when they want gross, you might seem to be hiding expenses. Know the difference and always specify which number you're giving.
A high gross burn with high MRR is a sign of a healthy, growing company. A high net burn with low MRR is a sign of a company that must either cut costs, grow revenue, or raise capital — fast. This calculator shows you both, updated in real time as you type.
How to Calculate Your Monthly Cash Burn Rate
A cash burn calculation tells you exactly how much money your business is losing each month. To calculate your monthly cash burn rate, follow this formula:
Monthly Burn Rate Formula
Monthly Burn Rate = Total Monthly Expenses − Monthly Revenue
Cash Burn Rate Formula
Cash Runway = Cash Balance ÷ Monthly Burn Rate
Example cash burn calculation: If your startup spends $80,000/month and earns $20,000 in MRR, your monthly cash burn rate is $60,000. With $420,000 in the bank, your cash runway is 7 months.
For the most accurate cash burn rate, use a 3-month rolling average instead of a single month. This smooths out one-time expenses and gives you a more reliable runway projection. Our calculator does this automatically when you enable 3-month averaging mode.
Frequently Asked Questions
How long will my startup last with my current burn rate?
Divide your current cash balance by your net burn rate. If you have $500,000 and net burn of $50,000/month, you have 10 months. Our calculator does this automatically and projects it on a chart month by month.
What is a healthy startup runway?
Most investors and advisors recommend 12–18 months of runway at all times. With 18+ months you can fundraise from a position of strength, not desperation. With under 6 months you're in crisis mode — either cut burn immediately or start fundraising today.
What is the burn rate formula?
Net Burn Rate = Total Monthly Expenses − Monthly Revenue (MRR). Runway (months) = Cash Balance ÷ Net Burn Rate. If net burn is zero or negative (profitable), runway is infinite.
When should I start fundraising based on runway?
Start your fundraise when you have 9–12 months of runway. Raising takes 3–6 months. If you wait until you have 6 months left, you're already behind. The best time to raise is when you don't urgently need to.
What's the difference between burn rate and run rate?
Burn rate refers to how fast you're spending cash (outflows). Run rate refers to your projected annual revenue based on current MRR (inflows). Both are important — burn rate tells you how long you have, run rate tells you how fast you're growing.
What is the difference between gross burn rate and net burn rate?
Gross burn is total cash spent monthly. Net burn subtracts your revenue — it's the real measure of how fast your cash reserves are shrinking. Our calculator tracks net burn by default.
Should I use last month's burn rate or a 3-month average?
Use a 3-month average for more accurate runway projections. A single month can be skewed by one-time expenses. Switch to "3-Month Average" mode in this calculator to auto-calculate it.
How much runway do investors expect?
Most investors want to see at least 12–18 months of runway post-investment. This gives you enough time to hit meaningful milestones before your next raise.
When should I start fundraising?
Start when you have 6–9 months of runway remaining. Fundraising typically takes 3–6 months, and waiting until you have 2–3 months left eliminates your negotiating leverage.
What are the biggest levers for reducing burn rate?
The "Big Three" expenses — payroll, marketing, and office/rent — typically account for 70–80% of burn. The most sustainable reduction is increasing MRR, not just cutting costs.
What is a healthy burn rate for a startup?
There's no universal answer — what matters is your runway relative to your next milestone. If you can reach profitability or a fundraising round before cash runs out, your burn rate is sustainable.
What does burn rate mean?
Burn rate means the speed at which a company spends its cash reserves before generating positive cash flow. It is typically expressed as a monthly dollar amount. A $50,000 monthly burn rate means the company spends $50,000 more than it earns each month.
What is cash burn and how do you calculate it?
Cash burn is the total amount of cash a company spends each month beyond its revenue. To calculate your cash burn rate: subtract monthly revenue from total monthly expenses. Then divide your cash balance by that number to get your runway in months.
How do you calculate monthly burn rate?
Add up all expenses for the month (salaries, rent, tools, marketing) — that is your gross burn. Then subtract your monthly revenue to get net burn. For a more stable number, use a 3-month average. Monthly Burn Rate Formula: Net Burn = Total Expenses − Revenue.