Why use net burn rate instead of gross burn rate?

Net burn rate subtracts your revenue from your expenses. Since most startups bring in some revenue, using net burn rate provides a much more accurate and realistic timeline of survival than gross burn rate.

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💼 Business

Startup Cash Runway Calculator

Q: What is startup runway?

A startup's runway is the amount of time (usually in months) the company has before it completely exhausts its cash reserves, assuming current income and expenses stay constant.

Calculate your startup's cash runway based on current cash reserves and monthly burn rate.

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Current Cash Balance ($)

Total Monthly Revenue ($)

Total Monthly Expenses ($)

Startup Cash Runway and Burn Rate

A startup's "runway" is the amount of time the company has before it completely exhausts its cash reserves, assuming current income and expenses stay constant. Knowing your exact runway is critical for startup founders to know precisely when they need to secure their next round of venture capital funding or reach profitability.

Formula for Cash Runway

Net Burn Rate = Total Monthly Expenses - Total Monthly Revenue

Cash Runway (Months) = Current Cash Balance / Net Burn Rate

Why "Net" Burn Rate Matters

While "Gross Burn Rate" simply represents all of your monthly expenses, your Net Burn Rate subtracts the revenue your company is generating. Because most startups are actively bringing in some revenue even while operating at a loss, using the net burn rate ensures you aren't underestimating your actual survival timeline.