Cash Management

Burn Rate & Cash Runway Calculator

Calculate how fast you're burning cash and how long until you run out. Essential for fundraising and financial planning.

Burn Rate

How much cash you lose per month

Gross Burn Rate

Total monthly expenses

Net Burn Rate

Expenses - Revenue

Cash Runway

Months until you run out of money

Runway = Cash / Monthly Burn

Example: $600K / $50K = 12 months

How to Calculate Burn Rate

Step 1: Calculate Gross Burn

Sum all monthly operating expenses

Include in Gross Burn:

• Salaries & benefits
• Rent & utilities
• Software & tools
• Marketing spend
• Infrastructure (AWS, etc.)
• Professional services

Example: $200K/month total expenses

Step 2: Calculate Net Burn

Subtract monthly revenue from expenses

Net Burn = Expenses - Revenue

Example: $200K expenses - $100K revenue = $100K net burn

✓ Positive (revenue > expenses) = Cash flow positive!

⚠ Negative = Burning cash (need funding or profitability)

Step 3: Calculate Cash Runway

Divide cash balance by monthly net burn

Runway (months) = Cash Balance / Net Burn Rate

Example: $1.2M cash / $100K burn = 12 months runway

Runway Guidelines

18+ Months

Excellent

Comfortable position. Focus on growth and product. No immediate fundraising pressure.

12-18 Months

Healthy

Good position. Start preparing for next fundraise. Build relationships with investors now.

6-12 Months

Caution

Start fundraising NOW. Takes 3-6 months to close a round. Cut non-essential spending.

< 6 Months

Critical

Emergency mode. Dramatically cut costs. Consider bridge financing. Focus only on survival metrics.

How to Extend Runway

Reduce Burn

  • →Pause hiring: Biggest expense, easiest to delay
  • →Cut marketing: Reduce paid ads to profitable channels only
  • →Renegotiate contracts: SaaS tools, office space, vendors
  • →Go remote: Eliminate office costs

Increase Revenue

  • →Price increase: 10-20% can buy months
  • →Annual plans: Get cash upfront
  • →Focus on enterprise: Larger contracts, faster
  • →Upsell existing: Easiest revenue to capture

Fundraising Timeline

Start fundraising with 9-12 months runway. Typical timeline:

Month 1-2

Prep deck, update metrics

Month 2-4

Initial meetings, term sheets

Month 4-5

Due diligence

Month 5-6

Close & wire funds

Related Calculators

ARR/MRR Tracker

Track revenue growth

Rule of 40

Growth + Profitability

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Complete financial model

Model Your Financials

Calculate burn rate, runway, and all critical SaaS metrics in one place

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