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Burn Rate and Runway Calculator

Months of runway at current burn.

Reviewed by the Calculation Machine team · Updated 24 October 2026 · How we check our maths

Your values

ⓘ Live results

Results
Runway with growth
120 months
Net monthly burn
$57,000.00
Flat runway
8.4 months
Break-even revenue
$95,000.00

Quick answer

Net burn rate is monthly cash spending minus monthly revenue, and runway is cash in the bank divided by net burn. A startup with $1.2M in cash, spending $140,000 a month and earning $20,000, burns $120,000 net and has 10 months of runway. If revenue grows 5% a month, that stretches to about 11 months.

What the Burn Rate and Runway calculator does

This calculator tells you how fast a business is using cash and how long it can keep going before the money runs out. It shows net monthly burn, runway at today's revenue, runway if revenue keeps growing at a steady monthly rate, and the revenue you need to stop burning cash altogether.

Founders use it to decide when to start fundraising or cut costs, finance leads use it for board updates, and investors use it to judge how urgently a company needs capital. It is equally useful for any loss-making business, such as a new restaurant or agency, living off a cash reserve.

The growth projection assumes spending stays flat while revenue compounds monthly. In practice, spending usually rises as you hire, so the growth runway is a best case. If revenue would overtake spending before the cash runs out, runway shows the 120-month maximum, which means cash does not run out on these assumptions; the break-even calculator helps plan that crossover.

The formula

Net burn = monthly spend − monthly revenue Flat runway = cash ÷ net burn Growth runway: each month, cash −= spend − revenue, then revenue × (1 + g); count months until cash ≤ 0 (max 120)

Formula variables
SymbolMeaningUnit
cashCash and cash equivalents available now$
spendTotal monthly cash outflows: payroll, rent, software, marketing, cost of sales, debt payments$ per month
revenueCash actually collected from customers each month$ per month
gMonth-over-month revenue growth rate% per month

Gross burn is total monthly spending; net burn subtracts revenue and is what actually reduces your cash. Use cash figures, not accounting profit: annual prepayments, slow-paying invoices and loan drawdowns all make cash burn differ from the income statement. The growth runway counts the month in which cash runs out as a full month, so it is rounded up.

Worked examples

Seed-stage startup with growing revenue

A startup has $1.2M in the bank, spends $140,000 a month, collects $20,000 in revenue and is growing revenue 5% a month.

Inputs

  • Cash in bank1200000 $
  • Monthly spend140000 $
  • Monthly revenue20000 $
  • Revenue growth5 %

Result

  • Runway with growth11 months
  • Net monthly burn$120,000.00
  • Flat runway10 months
  • Break-even revenue$140,000.00

Ten months flat, about 11 with growth. Revenue is too small for growth to matter much yet, so the company should be preparing to raise now rather than relying on sales to extend runway.

Agency covering a gap from reserves

An agency lost a large client. It has $300,000 in reserves, spends $60,000 a month and now bills $35,000, with no growth assumed.

Inputs

  • Cash in bank300000 $
  • Monthly spend60000 $
  • Monthly revenue35000 $
  • Revenue growth0 %

Result

  • Runway with growth12 months
  • Net monthly burn$25,000.00
  • Flat runway12 months
  • Break-even revenue$60,000.00

12 months of runway at a $25,000 net burn. Cutting $10,000 of monthly costs would extend that to 20 months, often a faster fix than winning new work.

Series A company scaling its team

A company with $2M in cash spends $250,000 a month, earns $60,000 and grows revenue 3% a month.

Inputs

  • Cash in bank2000000 $
  • Monthly spend250000 $
  • Monthly revenue60000 $
  • Revenue growth3 %

Result

  • Runway with growth12 months
  • Net monthly burn$190,000.00
  • Flat runway10.5 months
  • Break-even revenue$250,000.00

About 10.5 months flat and 12 with growth. With fundraising often taking several months, this company should already be talking to investors or planning cost cuts.

How much runway is enough

Common startup guidance, rather than hard rules:

Runway rules of thumb for venture-backed startups
Runway leftTypical stance
18–24 monthsComfortable; the usual target right after raising a round
12–18 monthsPlan the next raise and hit milestones investors will look for
6–12 monthsFundraise actively or move toward break-even
Under 6 monthsUrgent: cut costs, seek bridge funding or explore a sale

Ways to extend runway

  • Cut costs that don't drive growth: unused software, office space, low-return marketing. Runway rises faster than the saving: on $300,000 of cash, cutting a $25,000 net burn to $15,000 takes runway from 12 to 20 months.
  • Collect cash sooner: annual upfront billing, shorter payment terms or deposits on projects.
  • Defer non-essential hiring: payroll is usually the largest line item.
  • Raise prices for new customers, which improves burn without extra cost.
  • Raise or borrow before you need to; terms are better when runway is long. A new round dilutes existing holders, which the equity dilution calculator quantifies.

Growth assumptions and the path to break-even

Break-even revenue equals your monthly spend: once revenue covers it, net burn is zero. At a steady monthly growth rate g, the months needed to get there are log(spend ÷ revenue) ÷ log(1 + g). From $38,000 to $95,000 at 8% a month takes about 12 months.

Whether you get there before the cash runs out is the key question this calculator answers. Track actual monthly recurring revenue and growth with the MRR and ARR calculator, and remember that churn reduces net growth; the churn rate calculator measures it.

How to use the Burn Rate and Runway Calculator

  1. 1Enter cash available now, including money-market funds you can access quickly.
  2. 2Enter average monthly cash spending over the last three months, including payroll and cost of sales.
  3. 3Enter average monthly revenue collected (cash received, not invoiced).
  4. 4Enter expected month-over-month revenue growth, or 0 for a conservative flat case.
  5. 5Compare flat and growth runway; a result of 120 months means revenue overtakes spending before the cash runs out.

Frequently asked questions

How do you calculate burn rate?

Subtract monthly revenue from monthly cash spending to get net burn. Spending $80,000 and earning $30,000 is a net burn of $50,000 a month.

What is the difference between gross burn and net burn?

Gross burn is total monthly spending, ignoring revenue. Net burn subtracts revenue and is what actually depletes your cash, so it drives runway.

How do I calculate runway?

Divide your cash balance by net monthly burn. $600,000 in the bank at a $50,000 net burn gives 12 months.

When should a startup start fundraising?

Common advice is to start with at least six to nine months of runway left, because raising a round often takes several months from first meetings to cash in the bank.

Should I use average or latest month figures?

Use a three-month average to smooth one-off payments, but check the latest month too. If spending is rising, the latest month gives the more realistic runway.

References

  • Venture Deals (Brad Feld & Jason Mendelson) — John Wiley & Sons
  • ASC 230, Statement of Cash Flows — Financial Accounting Standards Board

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