Burn Rate Calculator

Enter your monthly expenses (cash out) and your monthly revenue (cash in). The tool returns net burn (expenses minus revenue) and, if you also provide cash on hand, the months of runway you have at the current rate.

Use it weekly. Burn changes faster than founders realize, especially after a hire or a big tooling decision. Most startups misjudge runway by a month or two because they confuse gross burn (expenses) with net burn (expenses minus collected revenue).

Cash on hand is what's actually in the bank, not the headline raise number. Subtract any committed-but-unspent payouts, taxes due, and severance reserves before you enter it.

Gross burn = total cash out per month. Net burn = cash out − cash in (revenue collected). Runway months = cash on hand ÷ net burn. The math is trivial; the discipline is in measuring each input correctly. Cash out includes everything: payroll, contractors, software, hosting, rent, taxes, the founder's salary, interest payments, repayments. Cash in is what actually settled into the bank in the month, not what you invoiced — invoices that haven't been paid yet are not cash.

Worked example. A pre-revenue startup spends $80k/month: $60k payroll + benefits, $5k AWS, $3k SaaS subscriptions, $5k contractors, $4k office and admin, $3k marketing experiments. Cash on hand after the seed: $1.4M. Runway = $1.4M / $80k = 17.5 months. Hire a senior engineer at $200k base plus benefits — burn jumps to roughly $98k/month. Runway shrinks to 14 months. The founder's mental model of "we have over a year" gets quietly rewritten the moment the offer letter goes out. The calculator surfaces this in real time so the decision is made eyes-open.

What to subtract from cash on hand before computing runway. Accrued payroll taxes due next quarter. Severance reserves if you're already planning a wind-down. Commitments under non-cancellable contracts (SaaS annual commits, office leases). Money you've raised but is sitting in escrow or on a SAFE that hasn't converted. The headline cash figure on your balance sheet often overstates available runway by 5-15%. Be conservative.

Where founders get the math wrong. Confusing gross and net burn. A startup with $50k/month gross burn and $30k/month revenue has $20k net burn. People quote the $50k as "our burn" and panic; the real number is $20k. Conversely, when revenue is unstable, net burn fluctuates, and the trailing-3-month-average net burn is a better runway input than last month alone.

A contrarian opinion: runway extension via burn cuts is overrated as a survival strategy. Cutting from $80k to $60k extends runway by a few months but rarely changes the company's trajectory. Hitting product-market fit and unlocking efficient revenue growth changes the trajectory. If the company is a year from PMF and 8 months of runway, cutting $20k/month from burn buys you 4 more months — usually still not enough. Either raise more cash or accelerate to PMF; small burn-trim moves are tactical at best.