Burn Rate Calculator
Turn two bank-balance snapshots into your gross and net monthly burn rate — the numbers investors use to judge how fast your startup consumes cash.
Reviewed by the CalcCafe editorial team · Last updated 18 July 2026 · How we test our tools
Example
Your startup began the quarter with $1,000,000 in the bank and ended with $850,000, earning $20,000 of revenue per month. Cash consumed is $150,000 over 3 months, so net burn = 150,000 ÷ 3 = $50,000/month. Gross burn adds back the revenue collected: (150,000 + 20,000 × 3) ÷ 3 = $70,000/month of total outflow. Annualized net burn is 50,000 × 12 = $600,000.
How it works
Net burn = (cash at start − cash at end) ÷ months in period — the rate your bank balance actually falls. Gross burn = (cash consumed + revenue collected) ÷ months — your total monthly outflow before revenue offsets it, so gross burn = net burn + monthly revenue. Annualized net burn = net burn × 12. Measuring across a full quarter smooths out lumpy items like annual insurance payments or quarterly tax remittances; a single month can mislead badly.
Good to know
Gross and net burn answer different questions. Gross burn — total monthly outflow on payroll, rent, cloud spend and everything else — measures the size of your cost base and what would need cutting in an emergency. Net burn — outflow minus revenue — measures how fast the bank balance actually falls, which is what determines runway. A company with $70k gross burn and $50k net burn dies at exactly the same speed as one with $500k gross and $50k net, but the second has far more cost-cutting room if revenue stumbles.
Investors quote net burn because it connects directly to runway and to the size of your next round: a startup burning $50k/month net needs roughly $1.2M to buy 24 months. Expect the question ‘what’s your monthly burn?’ to mean net burn, quoted as a recent 3-month average — one month is too noisy, a 12-month average hides recent hiring. State the window you used; sophisticated investors will also want the trend, not just the level.
Fundraising distorts naive burn math. If you close a round mid-period, the cash injection makes start-minus-end look tiny or even negative, hiding true operating burn. Strip financing inflows (and one-off items like tax refunds, grants or asset sales) from the balances before computing, or compute burn from your operating cash-flow statement instead. The same applies to venture debt drawdowns — borrowed cash is not reduced burn.
Paul Graham’s default-alive test frames the stakes: with current growth and current burn, do you reach profitability before the money runs out? A default-alive company raises on its own terms or not at all; a default-dead company must raise, and everyone across the table knows it. Compute your status honestly whenever burn or growth changes materially — most founders overestimate how willing future investors will be to fund a company whose burn has been growing faster than its revenue.
Frequently asked questions
What is the difference between gross burn and net burn?
Gross burn is total monthly cash outflow — payroll, rent, infrastructure, everything. Net burn subtracts revenue collected, so it is the rate your bank balance actually declines. Gross burn sizes your cost base; net burn determines your runway.
Why do investors focus on net burn?
Because net burn maps directly to runway and round size: a company burning $50,000 a month net needs about $1.2 million to fund 24 months. When an investor asks for your burn rate, they almost always mean net burn averaged over the last three months.
How does raising a round affect my burn calculation?
Financing inflows must be excluded from the cash balances, otherwise start-minus-end understates or even hides operating burn. Strip out fundraising, venture-debt drawdowns, grants and other one-off inflows so the figure reflects true operating consumption.
Is my data uploaded anywhere?
No — this calculator runs entirely in your browser. Your cash balances and revenue figures never leave your device, and the page works offline once loaded.
People also ask
How do I calculate my startup's burn rate?
Take cash at the start of a period minus cash at the end, and divide by the number of months. $1,000,000 falling to $850,000 over three months is a $50,000 monthly net burn. Add back monthly revenue to get gross burn.
What does default alive mean for a startup?
A term from Paul Graham: a startup is default alive if, at current growth and burn, it reaches profitability before the cash runs out. Default dead means it must raise again to survive — a much weaker negotiating position with investors.
What is a reasonable burn rate for a seed-stage startup?
There is no universal number — it depends on what was raised and the runway target. A common discipline is sizing burn so the round funds 18-24 months, so a $1.5M seed suggests net burn around $60,000-$80,000 a month at most.
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Sources & references
These tools follow our methodology and provide educational estimates only — verify important figures with a qualified professional.