How it works
Gross burn is everything you spend in a month. Net burn is spending minus revenue: the amount your cash balance actually falls each month. Runway is how many months that cash lasts at the current net burn.
Add a monthly revenue growth rate to see how growth stretches the runway. The month-by-month table shows the cash balance falling to zero.
Raising money typically takes 6 months or more, so many founders start fundraising or cutting costs once runway drops below 12–18 months.
Formula
Net burn = Monthly expenses − Monthly revenue. Runway (months) = Cash ÷ Net burn.
Questions people ask
Should I use gross burn or net burn for runway?
Net burn, because revenue offsets spending. Gross burn is useful as a worst-case figure if revenue were to stop.
How much runway should a startup have?
A common guideline is 18–24 months after a funding round, and to begin raising again with at least 6–9 months left.
Should I average burn over several months?
Yes. Monthly spending is lumpy (annual software bills, bonuses, taxes). A 3-month average of net burn gives a more reliable runway estimate.