Burn Rate Calculator - Startup Runway

Calculate monthly burn rate and runway for startups. Track cash spending and estimate time until funds run out. For founders and CFOs.

Monthly Cash Balance

Enter the cash balance at the end of each month. Add up to 12 months for more accuracy.

Burn Rate Analysis

Your calculated burn rate and runway estimates.

Average Burn Rate

Estimated Runway

Runway End Date

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Frequently Asked Questions

Find the answers to the most frequently asked questions below. If your question isn't here, or you need more info, or have feedback, please reach out.

What is burn rate for startups?

Burn rate is a measure of how quickly a company is spending its cash reserves, typically calculated on a monthly basis. It's especially important for startups that are not yet profitable and rely on investor funding. The burn rate helps determine the company's runway, which is the amount of time the company has before it runs out of cash. A negative burn rate means you're spending more than you earn, while positive means you're generating cash.

How do you calculate burn rate?

Burn rate is calculated by subtracting your cash balance at the end of one month from the cash balance at the beginning of that month. For example, if you started with $10,000 and ended with $8,000, your burn rate is $2,000 per month. To get a more accurate picture, calculate the average burn rate over multiple months by adding all monthly burn rates and dividing by the number of months.

What is runway in business?

Runway is the amount of time a company can continue operating before running out of cash, based on its current burn rate. It's calculated by dividing your current cash balance by your average monthly burn rate. For example, with $60,000 in the bank and a $10,000 monthly burn rate, you have 6 months of runway. Runway is critical for startups to plan fundraising and reach profitability before cash runs out.

What is a good burn rate for a startup?

A good burn rate depends on your funding stage and revenue. Early-stage startups typically aim for 12-18 months of runway. Investors generally want to see at least 12 months of runway remaining. The key is balancing growth investment with financial sustainability. Track your burn rate monthly and adjust spending if runway drops below 6 months. Aim to reduce burn rate as you approach product-market fit and revenue growth.

How can I reduce my company's burn rate?

To reduce burn rate, focus on cutting non-essential expenses, negotiating better vendor contracts, optimizing marketing spend, and improving operational efficiency. Consider reducing headcount growth, moving to cheaper office space, or switching to more cost-effective tools. However, be careful not to cut investments critical for growth. Use this burn rate calculator regularly to monitor your spending and make data-driven decisions about where to reduce costs.

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