Home › Dictionary › Burn Rate t.category && Finance & Metrics

Burn Rate

Also known as: cash burn, monthly burn

The rate at which your company spends cash each month, showing how quickly you're depleting your bank balance.

What it is

Burn rate is how much cash your company consumes per month. It's the engine behind your runway calculation.

Facts

Gross burn = total monthly cash spent (all operating costs).
Net burn = gross burn minus monthly revenue, the true rate your bank balance falls.
Example: $80k spend and $30k revenue = $50k net burn.
Default alive means growth would make you profitable before cash runs out; default dead means it wouldn't.

Who it's for

Every founder managing a bank balance, critical for pre-profit startups.

How it helps you

Tracking burn lets you calculate runway, decide on hires and spending, and know whether you're trending toward profitability or a cash crisis.

Caveats

Don't confuse gross and net burn. They can differ dramatically. Burn can spike from one-off costs, so watch the trend, not just a single month.

Conclusion

Burn rate is how fast you're spending; watch net burn monthly and pair it with runway to stay ahead of a cash crunch.

How it helps you

How fast you're spending cash each month, the input that decides your runway and whether you're default alive or dead.

#finance#burn#cash#profitability#spending#analytics#fundraising#operations

Learn the term, then do the thing.

FoundersCheckList.AI turns concepts like this into real tasks and practical guidance.

See plans →

Keep exploring

Related across the site

NewsVC portfolio-ops startup Standard Metrics raises $20M Series BInvestors increasingly collect founder metrics through platforms like this, so expect standardized reporting and data requests post-raise; keep clean, exportable financials and KPIs ready.NewsBDC expands Pivot to Grow loan for tariff-hit SMEs: financing from $250K, revenue floor cut to $1MA Canadian founder whose sales are hit by U.S. tariffs (at least 15% of sales from U.S. exports, or a 10%+ tariff-driven revenue drop or cost increase) can apply directly through BDC for liquidity, pivot, or equipment financing. The lower $1M revenue floor and streamlined process make it reachable for earlier-stage exporters than before.NewsBrazil launches 5th Eco Invest auction to fund green-tech innovationClimate, energy, or deeptech founders should read the manual on the National Treasury portal and check eligibility for the innovation-fund and non-reimbursable research tracks before the auction window, then line up a qualifying financial-institution partner to structure participation.Case studyReginald F. LewisTLC Beatrice International ChecklistFind real grants and free business helpGovernments offer loans, grants, and free advisors that most founders never claim. This checklist shows where the real support is and how to apply without wasting weeks.ChecklistHire an accountant that saves you moneyChoose between a CPA, an EA, and a bookkeeper, hire with confidence, and build a quarterly rhythm that catches tax savings before deadlines hit.