Burn rate calculator
For most founders, running out of money isn't a failure of vision. It's more likely a failure of math. SVB's 2025 analysis found that 61% of startups saw their cash runway shrink last year. With 29% of startups failing purely due to a cash crunch, knowing your burn rate is more crucial than you think.
Use the burn rate calculator above to find out exactly how much runway you have right now.
What is burn rate in business
Burn rate is the rate at which a company spends its cash reserves, typically measured monthly. It's one of the most closely watched metrics in startup finance by founders, CFOs, and investors alike.
Burn rate measures how fast that shrinking happens. It's the starting point for every major financial decision you'll make: hiring, fundraising, cutting costs, or pivoting.
There are two types of burn rate you need to know:
Gross burn rate is the total cash you spend each month before any revenue, like salaries, rent, software, marketing, and every operating expense. It tells you the full size of your cost base.
Net burn rate is what you actually lose each month after revenue is counted. If you're spending $150,000/month and bringing in $40,000, your net burn is $110,000/month. This is the number that determines your runway (how long your business can operate before cash runs out) and the one investors are looking at.
Most investors and financial models use net burn rate when evaluating a company. Gross burn reveals your cost structure. Net burn tells you how long you actually have.
How to use the burn rate calculator
The burn rate calculator works on three inputs and returns your monthly cash burn and runway instantly.
Step 1: Enter your starting cash balance
Enter the cash sitting in your bank account today. No credit lines, no receivables, no assets you can't immediately liquidate.
Step 2: Enter your monthly revenue
Recurring customer income for the same period. If you're pre-revenue, leave this at 0.
Step 3: Enter your total monthly expenses
Enter a single figure, or hit "Break down expenses" to split it across payroll, software, marketing, rent, and other costs. The breakdown is worth doing, as most founders are surprised by how the split looks.
Step 4: Your results appear on the right
Get a full overview of your business’ gross burn, net burn, cash runway in months, a visual status indicator, and a "what this means for you" insight.
Understanding your calculator results
The calculator labels your position automatically. Here's what each status means for your business right now.
Cash flow positive / Healthy
Revenue is covering expenses and net burn is zero or negative, then you're not consuming cash. This is the position every founder is building toward. Use it. Double down on what's driving revenue, make the hires you've been deferring, and keep tracking burn monthly so you stay here.
Moderate
You're burning cash, but with over 12 months of runway you have room to operate without panic. The mistake founders make at this stage is treating it as comfort. Start modeling your next fundraise, build your investor pipeline, and keep a close eye on whether burn is trending up or down month over month.
Attention needed
Your runway is 6–12 months, which sounds like enough until you factor in that most fundraising rounds take 3–6 months to close. If you're not already in conversations with investors, start now. Tighten discretionary spend and use the expense breakdown in the calculator to identify where cuts are possible without slowing growth.
Critical
Runway under 6 months is an immediate operational one. Every week of inaction shortens your options. Cut non-essential costs today, push hard on converting pipeline to revenue, and contact your existing investors about a bridge round before approaching anyone new.
What is a good cash burn rate?
What counts as a good cash burn rate depends on your stage, industry, revenue model, and the funding environment. In the current "efficient growth" era, investors are scrutinizing both raw burn and capital efficiency more closely than at any point in the last decade.
Most experienced investors and CFOs recommend maintaining a minimum of 12 to 18 months of runway at all times. At 6 months, you should already be in fundraising conversations. Below 3 months, you're in crisis mode.
Startup burn rate benchmarks by funding stage
Source: Startup Burn Rate: Metrics, Benchmarks & Tips for CEOs
Founder insight: The number in your burn column matters less than the trend. A Series A company burning $400,000/month with revenue growing 20% month-over-month is in a stronger position than a seed startup burning $80,000/month with flat revenue and no clear path to raising. Investors read burn rate in context, and so should you.
Why calculating burn rate matters
Determine when to fundraise
Most founders start their fund-raising three months too late. By the time they realize the runway is running short, they're negotiating from desperation rather than strength. Seed-to-Series A rounds take 3–6 months to close. If you have 5 months of runway today, you may already be in a difficult position.
Runway determines your decision window
Runway = cash on hand ÷ net burn. That number is your timeline for every major decision. It shows how long your current cash can support your business at today’s burn rate. That number defines how much time you have to adjust, grow, or raise capital. When you know your burn and runway, decisions stop being reactive. You can't act on a number you don't have. Run your figures through the burn rate calculator above and know exactly where you stand today.
Investors read it as a signal
Before an investor looks at your pitch deck, they look at your burn and runway. A high burn with flat revenue signals that capital efficiency isn't a priority. A disciplined burn shows that the business knows how to operate.
How to reduce your burn rate
Hire behind the revenue curve
Payroll is 60%+ of gross burn for most startups. Only hire when not hiring is costing you more in lost revenue than the salary itself. Hire behind revenue, not ahead of it.
Don't confuse your p&l with your cash position
The difference between accrual and cash basis accounting means your P&L can show profit while your bank account is running dry. Revenue recorded under accrual accounting isn't cash in hand. Manage it by the statement of cash flow's operating activities; if it's not in the bank, it doesn't extend your runway.
Every strategy above starts with knowing your baseline. Use the burn rate calculator above to see your current monthly cash burn and runway before you make any changes.
Run a zero-based monthly expense audit
Most startups carry ghost burn, like SaaS seats for former employees, redundant tools, and premium tiers that nobody uses. Pull your bank and card statements and cancel everything that isn't mission-critical. A 10% cut on $150,000/month in monthly cash burn buys you an extra month of runway every year without touching headcount.
The fastest way to stop ghost burn is blocking it before it hits your account. Aspire's corporate cards2 let you set spending limits by vendor and category, so a SaaS trial can't quietly convert into a recurring charge.
Frequently asked questions
How do you calculate burn rate (Net vs. Gross)?
To find your gross burn rate, total all monthly operating expenses (payroll, rent, software). To find your net burn rate, subtract your monthly revenue from that total. For a historical average, use the formula: (Starting Cash − Ending Cash) ÷ Number of Months. This tells you the actual rate at which your bank balance is dropping.
Why does my P&L show a profit but my burn rate is high?
A financial P&L statement often records revenue when a deal is signed (accrual), but your burn rate cares about when the cash actually hits your account. High growth can actually increase burn if you’re spending cash to deliver services before the customer pays their invoice.
Is EBITDA the same as burn rate?
No. EBITDA measures operating profitability on paper. It doesn't account for actual cash movement. Burn rate measures real cash leaving your bank account each month. A business can show positive EBITDA and still have a dangerously high burn rate if cash is tied up in receivables or deferred revenue.
What does a cash runway mean?
Runway is how many months your business can keep operating before cash hits zero. Divide your current cash balance by your monthly net burn rate. Nine months of runway means nine months to grow revenue, cut costs, or close a funding round.
How do I calculate runway for a service-based company?
A service company profit and loss statement is heavily weighted toward headcount. To calculate runway, divide your current USD balance by your net burn, but build in a 20% "buffer." Service revenue is often lumpy; using platforms like Aspire helps you track these fluctuations in real time so a slow payment month doesn't catch you off guard.
What is a P&L statement & how is it different from burn rate?
A P&L statement shows revenue, expenses, and profit over a period to answer whether your business is profitable on paper. Burn rate shows how much cash your business is losing each month. A P&L can show profit while cash is still tight. Burn rate tells you how long your cash will last.
