Burn Rate Calculator [2025]

Fundraising Planning

Knowing your burn rate and runway helps you determine when you'll need to raise your next round of funding. It's generally recommended to start fundraising when you have at least 6-9 months of runway remaining.

Financial Health

Burn rate is a critical indicator of a startup's financial health. A high burn rate can signal that the company is spending too much relative to its revenue or funding, while a low burn rate may indicate efficient operations or, conversely, insufficient investment in growth.

Investor Communication

Investors will closely scrutinize your burn rate during due diligence. They want to see that you're managing your cash responsibly and have a plan for achieving profitability or securing future funding.

What's the difference between gross burn and net burn?

Gross burn is the total amount of operating expenses your company incurs in a month. Net burn is your gross burn minus your revenue (i.e., how much money you're actually losing each month). This calculator computes the average net burn rate.

What is a "good" burn rate?

There's no single answer, as it depends on your industry, stage, and business model. However, a lower burn rate generally indicates better financial health and a longer runway.

How can I reduce my burn rate?

• Re-evaluate your budget: Identify areas where you can cut costs without sacrificing essential operations or growth initiatives.
• Renegotiate with vendors: See if you can get better deals on software, services, or supplies.
• Increase revenue: Focus on sales and marketing efforts to boost revenue and offset expenses.
• Monitor your spending: Keep a close eye on expenses and make adjustments as needed.