Burn rate formulas
Gross burn = total monthly cash expenses
Net burn = monthly expenses - monthly revenue
If net burn is high relative to cash, the startup has less time to reach milestones or raise money.
How often should founders calculate burn?
Monthly is the minimum. Recalculate after major hiring, pricing, revenue, fundraising, or vendor changes.
What burn rate is too high?
Burn is too high when runway becomes shorter than the time needed to reach the next financing or profitability milestone.