Strategy & Funding

Burn Rate & Runway

How fast you're spending cash, and how many months until zero.

Your numbers

Cash in bank500,000 $

Monthly expenses (all-in)60,000 $

Monthly revenue20,000 $

Results

Gross burn

$60,000

Total cash going out per month, ignoring revenue

Net burn

$40,000

Cash actually lost per month after revenue (0 means you're default-alive)

Runway

12.5 mo

Months until the bank account hits zero at current net burn (shows — when revenue covers expenses: you're default-alive)

How it works

Net burn = monthly expenses − monthly revenue. Runway = cash in bank ÷ net burn.

Gross burn is what leaves your account each month; net burn is what leaves after revenue comes back in. Runway is measured against net burn — it's the number of months you have to reach profitability, raise, or die.

The classic mistake is computing runway on today's burn while planning to hire. Every new hire, price cut, or ad-budget bump shortens the number you just calculated. The second mistake: starting a fundraise with 6 months left — raises take 3–6 months, so treat 12 months as the alarm bell, not the deadline.

Worked example

You have $500,000 in the bank, spend $60,000/month, and bring in $20,000/month. Net burn = $40,000, so runway = $500,000 ÷ $40,000 = 12.5 months. If you're planning to raise, that means starting conversations now, not in month 10.