Business & SaaS

Runway & Burn Rate Calculator

What this does

Calculate net monthly burn from revenue versus expenses and translate your cash balance into months of runway.

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Calculator inputs

How to use it

Using the runway & burn rate calculator

  1. 01

    Enter today’s cash

    Bank balances plus anything liquidable within days; not undrawn credit facilities.

  2. 02

    Add monthly revenue and expenses

    Use trailing-average monthly figures rather than best-case forecasts.

  3. 03

    Read burn and runway

    Under ~6 months triggers most boards’ urgency threshold; plan fundraising or cuts well ahead.

Good to know

Why runway rules startup calendars

Fundraising realistically consumes 3–6 months from prep to wired funds. A company discovering it has 5 months of runway is effectively already late: investors price urgency, and desperate rounds dilute founders severely. Recompute runway monthly; treat the number as a countdown clock, not trivia.

Levers that change the clock

  • Cutting expenses extends runway linearly; but rarely painlessly.
  • Raising revenue helps doubly: it adds cash now and reduces future burn.
  • Hiring freezes, payment-term tightening and annual-prepaid plans all bend the curve.

Growth-stage companies sometimes choose to increase burn deliberately; the goal is not minimal burn but burn whose growth return justifies the shortened clock.

How it's calculated

The math behind this calculator

Net burn = Monthly expenses − Monthly revenue Runway (months) = Cash balance / Net burn

Net burn is the cash the business loses each month after revenue covers what it can. Dividing the bank balance by that loss yields runway; how many months survive at the current pace. When revenue meets or exceeds expenses, burn disappears and the calculator reports cash-flow positive instead of pretending infinity is a plan.

Assumptions & limitations

  • Revenue and expenses are averaged and held flat for the projection.
  • Accrual timing differences (invoices, annual prepayments) are ignored.
  • Existing cash includes everything freely accessible, not credit lines.

Worked example

A company holding $250,000 while burning $25,000 a month ($85k expenses minus $60k revenue) has 10 months of runway.

FAQ

Frequently asked questions

Is negative burn bad?
The opposite; it means the business is self-funding. The calculator flags cash-flow positive status rather than computing meaningless infinite runway.
Gross burn vs net burn?
Gross burn is total expenses alone; net burn nets off revenue. Investors usually mean net, but knowing gross matters for worst-case scenarios where revenue vanishes.
How much runway should I keep?
Common guidance: 12–18 months post-fundraise so the next round starts from strength, and a personal red line around 6 months for triggering cuts.

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