Burn Rate Calculator

Burn rate is the speed at which a business spends its cash, and runway is how long that cash lasts at that speed. Both come from one subtraction and one division — and almost every argument about them is really an argument about which numbers belong in the subtraction.

Cash in the bank todayCash on hand, not committed funding.Revenue per monthCash actually collected, not booked.Total expenses per monthEverything going out, including payroll.

Runway in months

Net burn per month: 50,000
Gross burn per month (ignoring revenue): 90,000
Runway if revenue were ignored: 5.5556

Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.

The formula this calculator uses

Net Burn = Monthly Expenses - Monthly Revenue; Runway = Cash Balance / Net Burn

Cash Balance: Cleared cash on hand today, excluding funding that has been signed but not received
Monthly Expenses: Everything leaving the account each month, payroll included
Monthly Revenue: Cash actually collected in the month, not invoiced or booked
Net Burn: Monthly expenses minus monthly revenue — the amount drawn from cash each month
Runway: Months of cash left at the current net burn, equal to cash divided by net burn

How to check the result by hand

1
Take the cash balance from the bank, not from the cap table
Use today's cleared balance: 500,000 in the example used here. Exclude rounds that are signed but not received, undrawn tranches and restricted balances such as a lease deposit. This is the one input that should be a fact rather than an estimate, and every other input inherits its reliability from this line.
2
Total everything leaving the account each month
Payroll, rent, software, contractors, hosting, marketing and tax instalments come to 90,000 per month in the example. Include employer taxes and benefits, which are routinely omitted and are a large fraction of the true cost of a salaried hire.
3
Total the cash actually collected, not the amount invoiced
40,000 per month here. Strip out deferred revenue, prepayments covering future months and anything billed but unpaid. If 55,000 was invoiced and 40,000 collected, only 40,000 belongs on this line, and the 15,000 difference is a collections problem rather than revenue.
4
Subtract to get net burn, and keep gross burn alongside it
90,000 minus 40,000 leaves 50,000 of net burn per month. Record the gross figure of 90,000 as well: it gives 5.5556 months on 500,000 of cash and is the number your runway falls back to if revenue stops entirely.
5
Divide, then set a date to do it again
500,000 divided by 50,000 gives 10 months. Book a monthly recalculation, because the same business three months from now holds 350,000 and has 7 months left. If a 20% cut to net burn is available, taking it to 40,000 stretches the same cash to 12.5 months.

For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Burn Rate page.