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 commonly underestimate burn when contractor invoices, annual SaaS renewals, and payroll tax are excluded from the monthly view.
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
What does burn rate mean and how do you calculate it?
Burn rate is the speed at which a company spends its cash reserves before reaching profitability, typically expressed as a monthly dollar amount. The formula: Net Burn Rate = Total Monthly Expenses − Monthly Revenue (MRR). Runway (months) = Cash Balance ÷ Net Burn Rate. Example: $500,000 cash and $50,000 net burn = 10 months of runway. If net burn is zero or negative (profitable), runway is infinite.
What is the difference between gross burn and net burn?
Gross burn is total cash spent monthly — every dollar out the door. Net burn subtracts your MRR (revenue). If you spend $100,000 and earn $40,000 in MRR, gross burn is $100,000 and net burn is $60,000. Net burn is the real measure of how fast your cash reserves are shrinking, and it's what investors care about most.
What is a healthy burn rate at Seed, Series A, and Series B?
Burn is relative to stage. For reference points widely cited in investor benchmarks: Seed-stage startups typically burn $50K–$150K/month with 18–24 months of runway post-raise. Series A startups often burn $200K–$500K/month targeting 18+ months. Series B and beyond can burn $500K–$2M+/month, but investors increasingly watch the Burn Multiple (net burn ÷ net new ARR) — under 1.0x is elite, 1–2x is healthy, over 3x triggers concern. The question is never "how much" but "how much progress per dollar burned."
What is a healthy startup runway?
The practitioner consensus is 12–18 months of runway at all times, and 18+ months immediately post-raise. With 18+ months you can fundraise from a position of strength. Under 6 months you're in crisis mode — cut burn immediately or start fundraising today. Paul Graham's "Default Alive or Default Dead?" framework is the classic reference: if current growth plus current spend leads to profitability before cash runs out, you're default alive.
When should I start fundraising based on runway?
Start when you have 9–12 months of runway left. Fundraising typically takes 3–6 months end-to-end (intros, meetings, term sheet, diligence, close). Waiting until you have 3 months of runway eliminates your negotiating leverage — investors smell desperation and price it in. The best fundraise is one you don't urgently need to close.
What is the difference between burn rate and run rate?
Burn rate measures cash outflows (how fast you're spending). Run rate measures projected annual revenue based on current MRR (MRR × 12). They're different sides of the P&L. Burn rate tells you how long you have; run rate tells you how fast you're growing. Investors look at both together — a $500K/month burn paired with $2M ARR run rate (0.25x burn multiple) is very different from the same burn with $200K ARR (2.5x burn multiple).
Should I use last month's burn rate or a 3-month average?
Use a 3-month rolling average for runway projections. A single month can be skewed by annual SaaS renewals, one-time legal fees, or delayed invoices. The 3-month average smooths these out and typically tracks closer to the actual trajectory. Switch to "3-Month Average" mode in this calculator to auto-calculate it from three months of expense data.
What are the biggest levers for reducing burn rate?
The "Big Three" — payroll, marketing, and office/rent — typically account for 70–80% of burn at early-stage startups. Payroll is usually the largest single line (often 50%+). Before cutting, examine: unfilled roles you can defer, vendor/SaaS stack consolidation (annual audit frequently reclaims 10–20%), and marketing channels with payback over 18 months. The most durable reduction is increasing MRR — a 20% MRR lift often beats a 10% expense cut because it compounds.
How does the cash cliff marker work?
The cash cliff is the exact month your projected cash balance hits zero at current net burn. This calculator plots it directly on the chart with a red marker. Use the burn reduction slider to simulate cuts and watch the cliff push right, or the "What if I raise?" slider to model a fundraise and see the cliff reset. Most founders are surprised how much a small MRR bump extends the cliff — compounding effect.