Startup Runway & Burn Rate Calculator
Calculate startup runway, burn rate, and cash flow to manage finances and plan funding needs effectively.
Enter Your Financial Data
Results
What is a Startup Runway & Burn Rate Calculator?
A Startup Runway & Burn Rate Calculator is a free financial tool that helps entrepreneurs and startups determine how long their current cash reserves will last. It calculates gross burn rate (total monthly expenses), net burn rate (monthly cash depletion), and runway (months until cash runs out).
This calculator is essential for:
- Startup Founders - Managing cash flow and planning fundraising timelines.
- Investors & VCs - Evaluating startup financial health and sustainability.
- CFOs & Finance Teams - Monitoring burn rate and optimizing spending.
- Business Planners - Creating realistic financial projections and budgets.
To understand your initial capital requirements, use our Startup Cost Calculator to estimate total startup expenses.
For profitability planning, check out our Breakeven Point Calculator to determine when your startup will become profitable.
To manage your overall business finances, try our Business Budget Calculator for comprehensive budgeting and expense tracking.
How This Calculator Works
The calculation uses the following formulas:
Where:
- Gross Burn Rate = Total monthly expenses (fixed + variable costs)
- Net Burn Rate = Actual monthly cash depletion after revenue
- Runway = Number of months until cash reserves are exhausted
- Cash Flow = Monthly revenue minus total expenses
If your net burn rate is zero or negative (revenue ≥ expenses), your runway is infinite because you're profitable or break-even.
Key Concepts Explained
Gross Burn Rate
Total monthly expenses including salaries, rent, marketing, and all operational costs. This shows how much you spend regardless of revenue.
Net Burn Rate
Monthly cash depletion after accounting for revenue. This is the actual rate at which you're burning through cash reserves.
Runway
Number of months your startup can operate before running out of cash at the current burn rate. Critical for fundraising timing.
Cash Flow
Net monthly change in cash (revenue minus expenses). Positive cash flow means you're adding to reserves; negative means depleting them.
How to Use This Calculator
Enter Cash Balance
Input your current total cash reserves and available capital.
Enter Monthly Revenue
Input your average monthly revenue or income.
Enter Expenses
Input both fixed operating expenses and variable costs separately.
Review Results
View your runway, burn rates, and cash depletion date instantly.
Benefits of Using This Calculator
- • Financial Visibility: Get clear insights into your cash position and how long your funds will last at current spending levels.
- • Fundraising Planning: Know exactly when to start fundraising (typically 6-9 months before cash depletion) to maintain leverage.
- • Expense Optimization: Identify opportunities to reduce burn rate and extend runway through strategic cost management.
- • Investor Communication: Present accurate burn rate and runway metrics to investors and stakeholders with confidence.
- • Strategic Decision-Making: Make informed decisions about hiring, marketing spend, and growth investments based on cash runway.
- • Risk Mitigation: Avoid running out of cash unexpectedly by monitoring runway and taking proactive action early.
Factors That Affect Your Results
1. Revenue Variability
Monthly revenue can fluctuate significantly, especially for early-stage startups. Seasonal trends, customer churn, and market conditions all impact actual runway.
2. Expense Fluctuations
Unexpected costs, hiring decisions, and scaling efforts can increase burn rate. Variable expenses like marketing and R&D can change month-to-month.
3. Growth Assumptions
Revenue growth projections and planned expense increases affect future runway. Conservative estimates provide more reliable planning.
4. Funding Rounds
Successful fundraising extends runway significantly. Plan fundraising 6-9 months before depletion, as raising capital typically takes 3-6 months.
Frequently Asked Questions (FAQ)
Q: What is burn rate?
A: Burn rate is the rate at which a company spends its cash reserves. Gross burn rate is total monthly expenses, while net burn rate is monthly expenses minus revenue. It's a critical metric for startups to track cash runway.
Q: What is a good runway for a startup?
A: A healthy startup runway is typically 12-18 months of cash reserves. This provides enough time to reach profitability, hit key milestones, or raise additional funding without running out of cash.
Q: How can I extend my runway?
A: Extend runway by reducing expenses (cut non-essential costs, negotiate better rates), increasing revenue (boost sales, raise prices, add revenue streams), or raising additional capital through investors or loans.
Q: What's the difference between gross and net burn rate?
A: Gross burn rate is your total monthly expenses. Net burn rate is expenses minus revenue, showing actual cash depletion. A profitable company has negative net burn (revenue exceeds expenses).
Q: When should I raise more funding?
A: Start fundraising when you have 6-9 months of runway remaining. Fundraising typically takes 3-6 months, so starting early prevents desperation and maintains negotiating leverage with investors.