Calculate your startup's monthly burn rate, net burn, and runway in months — so you know exactly when to raise or break even.
Use this free burn rate calculator to see how long your cash lasts, when you become default alive, and how revenue growth extends your runway.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
The cash your startup loses each month.
Burn rate is the rate at which a company spends its cash reserves. Gross burn is total monthly operating expenses. Net burn is gross burn minus monthly revenue — the figure investors actually care about because it determines runway.
Cash on hand divided by net monthly burn.
Runway equals cash on hand divided by net burn. With $1M in the bank and $50k/month net burn, runway is 20 months. If you have revenue that is growing, your runway extends as that revenue compounds — the simulator above shows the difference.
Paul Graham's test: will you reach profitability before cash runs out?
Coined by Paul Graham, "default alive" means that — given your current spend and revenue growth rate — you will become profitable before you run out of money. "Default dead" means you won't, and need to either raise more, cut burn, or accelerate growth.
At least 18 months between rounds.
The conventional rule is 18 months of runway between fundraises — enough to hit your next set of milestones plus a 6-month buffer to actually run the next raise. In tighter funding markets, founders aim for 24–30 months.
The mechanics in short answers — no jargon, no upsell.
Sum every dollar leaving the company in a typical month — payroll, rent, software, cloud, contractors. That number is your gross burn.
Net burn = gross burn − monthly revenue. This is the figure investors and board members track. A $200k gross burn with $80k revenue is a $120k net burn.
Divide cash on hand by net burn to get runway in months. With growth, revenue compounds each month, so real runway is longer than the static math suggests.
When monthly revenue grows past monthly expenses, net burn becomes net income. From that month on, you are no longer dying — you are default alive.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Stop guessing. See the month you run out of cash if nothing changes, down to the week.
Toggle revenue growth on and off to see how much extra runway your traction actually buys you.
The month your revenue catches up to expenses — the day your startup becomes self-sustaining.
Work backwards from "out of cash" to the date you must start fundraising — usually 6 months earlier.
Slide growth between 0% and 25% to see when realistic traction makes you default alive.
Identify the smallest expense cut that gets you to default alive without touching revenue.
Everything you might ask before, during, or after using this tool.
There is no single right answer, but most seed-stage SaaS startups burn $80k–$250k per month after their first hire or two. The right burn is whatever lets you hit Series A metrics (typically $1M+ ARR with strong growth) before running out of money.
Yes. Even if founders are taking below-market pay, include their actual draw. Investors model burn assuming founders are paid sustainably, and excluding founder compensation gives you a misleadingly rosy runway number.
Cash burn is real money leaving your bank. Accounting losses (P&L net income) can include non-cash items like depreciation and stock-based compensation. For runway math, only cash burn matters — investors and your bank balance both speak in cash.
Every dollar of new monthly revenue is a dollar less you need to fund from cash. As revenue compounds, net burn shrinks each month, and runway can extend by 30–100% versus the static "cash ÷ current net burn" calculation.
Begin conversations with at least 9 months of runway left. A typical Series A takes 3–6 months from first meeting to wire, and you want a margin of safety. Running out of runway mid-raise is the single biggest source of bad deal terms.
Mathematically, they're symmetric — both extend runway. Practically, cutting burn is faster and entirely in your control; growing revenue is more durable but slower. Most founders facing tight runway should do both: trim 15–25% of burn and double down on the channels already converting.
Burn multiple = net burn ÷ net new ARR. Investors generally want under 2x for Series A — meaning every $1 you burn produces $0.50 of new ARR. Anything below 1x is considered exceptional capital efficiency.
Weekly is overkill, monthly is the minimum. Most operators review burn at the same cadence as the board update — once a month, with a deeper look during quarterly planning. Recompute after any significant hire, contract, or revenue change.
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Gross burn is brutally simple: it's every dollar your company spends in a month, full stop. Payroll, rent, software subscriptions, contractor invoices, AWS bills, the office espresso machine subscription you forgot you signed up for. Add them up. That's gross burn.
Net burn is gross burn minus monthly revenue. This is the number that determines runway and the number you should be reporting in board updates. A $300k/month gross burn sounds terrifying until you mention you're also pulling in $250k/month — at which point your net burn is a survivable $50k.
In 2015, Paul Graham wrote a short essay that reframed how a generation of founders thinks about their startups. The question isn't "am I making money?" The question is: at your current growth rate and current burn, will you reach profitability before you run out of cash?
If yes, you're default alive. You can take your time, choose your investors, negotiate from strength. If no, you're default dead — and every decision you make should be evaluated through the lens of getting back to default alive.
The calculator above tells you which one you are, and what it would take to flip the answer.
For a decade, the canonical advice was to raise enough to fund 18 months of operations. Twelve months to hit your next milestones, six months to run the next raise. In bull markets, founders pushed that down to 12. In downturns, the smart ones push it up to 24 or 30.
The 18-month number assumes a relatively short fundraising cycle and a forgiving market. If you're raising into a downturn, hiring is harder, deals take longer, and term sheets get pulled. Plan for the world where everything takes 50% longer than you expect.
The math is uncomfortable but useful. Work backwards from the month you run out of cash. Subtract 3 months because Series A wires happen 3 months after a yes. Subtract another 3 months for the actual fundraise process. Subtract another 3 if you want to negotiate, not beg.
That gives you 9 months of runway minimum before you start the next raise. If you're reading this with less than 9 months in the bank, start tomorrow.
Two short notes worth reading before you trust any number on this page.
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