Burn rate calculator

Gross burn vs net burn

Gross burn is everything you spend in a month — salaries, infra, rent, subscriptions, contractors. Net burn is that spend minus the revenue you collected: the amount your bank balance actually drops. A startup spending $50K a month with $10K of revenue has $50K gross burn and $40K net burn.

When an investor asks about your burn, they mean net — it's the number that drains the account and sets your runway. But gross burn is worth watching too: it measures your commitment level. If revenue slips, gross burn is what you're still on the hook for, and the gap between the two is how much room you have before a revenue problem becomes a survival problem.

In your monthly investor update, report net burn and keep the definition consistent month over month — switching definitions mid-year is how founders accidentally look like they're hiding something.

Two ways to measure it

The expense-sum method adds up the month's outflows from your P&L or accounting tool. It's precise about what you meant to spend — and blind to what you forgot. Annual prepays, one-off contractor invoices, and refunds routinely slip through it.

The bank-delta method takes your balance a few months ago, subtracts today's, and divides by the months elapsed. It can't miss anything, because it measures the account itself. Use a three-month window: long enough to smooth one-time items, short enough to reflect the current plan. The calculator's bank-balance mode runs this method for you.

When the two methods disagree by more than a little, believe the bank — then go find the difference. That gap is usually the most useful thing this exercise turns up.

How burn feeds runway

Runway is cash divided by net burn — $500K of cash at $40K net burn is 12.5 months. That straight line bends as soon as revenue or expenses grow, which is why the runway calculator models both growth rates and finds your zero-cash date and default-alive month. How to calculate startup runway walks through the formula and the ways it misleads.

What this calculator doesn't do

• It doesn't separate one-time items — a laptop purchase or an annual insurance prepay lands in the month it hits. That's why the three-month bank-delta window beats a single-month snapshot.
• It doesn't model seasonality or growth — the implied runway is a straight line at today's pace.
• It reports the rate, not the plan. Whether $40K of net burn is discipline or drift depends on what it's buying you — see the burn rate guide and burn multiple for that conversation.