How to Use This Calculator
1
Enter Cash Position
Input your current cash balance and any expected incoming revenue or funding.
2
Enter Monthly Expenses
Break down monthly operating costs: payroll, rent, software, marketing, and other expenses.
3
Calculate Runway
See your gross burn rate, net burn rate, and how many months of runway remain before cash runs out.
Key Terms
- Gross Burn
- Total monthly cash expenditures, ignoring revenue — represents total operational cost.
- Net Burn
- Monthly cash decrease after subtracting revenue — the true rate of cash depletion.
- Runway
- The number of months a company can operate before exhausting its cash reserves.
- Default Alive
- Paul Graham's term: a startup that will become profitable before running out of money at current growth rate.
- Zero Cash Date
- The projected date when cash balance reaches zero, assuming no changes in burn or revenue.
Real-World Examples
Example 1
Pre-Revenue Startup
Cash: $1,200,000, Monthly Expenses: $85,000, Revenue: $0
Gross burn: $85,000. Net burn: $85,000. Runway: 14.1 months.
Example 2
Growth-Stage SaaS
Cash: $3,500,000, Monthly Expenses: $280,000, Revenue: $180,000
Gross burn: $280,000. Net burn: $100,000. Runway: 35 months.
Burn Rate by Startup Stage
| Stage | Typical Monthly Burn | Revenue Offset | Target Runway |
|---|
| Pre-Seed | $15,000-$40,000 | $0 | 12-18 months |
| Seed | $50,000-$150,000 | $0-$20,000 | 18-24 months |
| Series A | $150,000-$500,000 | $50,000-$200,000 | 18-24 months |
| Series B | $500,000-$1,500,000 | $200,000-$800,000 | 18-24 months |
| Series C+ | $1,000,000-$5,000,000 | $500,000-$3,000,000 | 24+ months |
Managing Your Startup's Burn Rate
The 18-Month Rule
Most VCs recommend maintaining at least 18 months of runway at all times. Fundraising takes 3-6 months, so starting the process at 12 months of runway means closing with only 6-9 months left — a dangerously weak negotiating position. If your runway drops below 12 months, treat it as an emergency: cut non-essential spending and accelerate revenue efforts.
Burn Rate Red Flags
Watch for these warning signs: burn increasing faster than revenue, burn exceeding plan by more than 15%, runway below 12 months without a clear path to profitability or fundraising, and net burn remaining flat while gross burn increases (meaning revenue is growing but so are costs at the same rate).