Burn Rate and Cash Runway Calculator

How it works

Net Burn = (Starting Cash - Ending Cash) / Months, Runway = Cash on Hand / Net Burn

Take the cash balance at the start of a period, subtract the balance at the end, and divide by the number of months in between. That is average net burn per month.

Divide the current cash balance by the monthly burn to get runway in months. If the balance grew over the period, burn is negative and runway is not a concern.

Worked example

A startup began the half-year with $500,000 and ended with $380,000. Net burn = (500,000 - 380,000) / 6 = $20,000 per month. Runway = 380,000 / 20,000 = 19 months.

Investors commonly advise keeping at least 12 months of runway, and starting the next fundraise when roughly 9 months remain.

Frequently asked questions

What is the difference between gross burn and net burn?

Gross burn is total monthly spending. Net burn subtracts revenue coming in. Runway calculations should use net burn.

How much runway should a small business keep?

For non-venture businesses, three to six months of operating expenses in cash is the common guidance. Venture-backed startups typically plan around 12 to 24 months between raises.

How can I extend runway?

Cut discretionary spend, collect receivables faster, negotiate supplier terms, and automate work that would otherwise need hires. Small efficiency gains compound over many months.

Related calculators

• Working Capital Calculator
• Break-Even Calculator