Burn Rate & Runway Calculator
Calculate your monthly net burn rate, gross burn rate, and cash runway in months.
How to use this tool
- Enter cash on hand, monthly revenue and monthly total expenses in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your cash runway and the full breakdown beneath it.
Runway tells you how many months until the company runs out of cash. Most investors advise maintaining at least 18 months of runway. Knowing your burn rate is the first step to extending it.
Formula
Gross Burn = Monthly Total Expenses
Net Burn = Monthly Expenses − Monthly Revenue
Cash Runway (months) = Cash on Hand ÷ Net Burn
How it works
This calculator distinguishes gross burn (total cash out each month) from net burn (cash out minus cash in), giving a clearer picture of how quickly a company is consuming its reserves. Cash runway is then computed by dividing current cash on hand by the net burn rate. The result assumes burn and revenue remain constant; actual runway will vary as the business grows or cuts costs.
Worked example
Worked example
- Gross burn = $15,000 monthly expenses.
- Net burn = $15,000 expenses − $5,000 revenue = $10,000 per month.
- Cash runway = $120,000 cash ÷ $10,000 net burn = 12 months.
Gross burn: $15,000/mo; Net burn: $10,000/mo; Cash runway: 12 months
Key terms
- Gross burn rate
- Total cash a company spends each month before accounting for any revenue.
- Net burn rate
- Monthly cash outflows minus monthly cash inflows. The true rate at which cash reserves shrink.
- Cash runway
- Number of months a company can continue operating at its current net burn before running out of cash.
- Cash on hand
- Liquid cash and cash-equivalent balances available to fund operations without raising new capital.
- Default alive
- A term coined by Paul Graham — a company is 'default alive' if projected revenue growth will cover costs before cash runs out.
Frequently asked questions
- What is the difference between gross burn and net burn?
- Gross burn is total monthly cash spent. Net burn subtracts revenue, showing the actual cash consumed per month. Net burn is what determines runway — it tells you how long your current cash will last at the current spending pace.
- How can I extend my runway?
- Cut non-essential expenses, accelerate revenue growth, raise additional capital, or offer discounts for annual prepayments. A common rule of thumb: if runway drops below 6 months, take immediate action.
- What is a healthy runway?
- Most VCs advise maintaining 18–24 months of runway at all times to allow time for fundraising (which typically takes 6–12 months) without operating under distress.