Burn Rate & Runway Calculator
Compute startup burn rate, runway in months, cash-out date, and runway-extension from cutting burn. Flags when revenue already covers burn.
Burn Rate & Runway Calculator
Enter cash on hand, monthly gross burn (total outflow), and any monthly revenue. The tool computes net burn, runway in months, projected cash-out date, and how much extra runway a cost-cutting scenario buys you. It also tells you when revenue already covers burn.
How to Use the Burn & Runway Calculator
Add up the company's cash
Add the balances of every account the company controls: current, savings and money-market accounts. Leave out undrawn credit lines and unpaid invoices, which are not cash yet, and any founder's personal money.
Total your monthly gross burn
Add every monthly outflow: payroll with its taxes and benefits, rent, software, hosting, marketing, contractors, fees and insurance. Spread annual bills over twelve months so one large payment does not distort the month.
Enter monthly revenue collected
Use cash actually collected in a typical month, not booked revenue. Net burn is gross burn minus this figure, and runway is cash ÷ net burn. If revenue covers burn, the tool says so and shows no run-out date.
Test a cost cut
Enter a percentage cut to gross burn and the tool recalculates net burn and runway. With no revenue, a 25% cut stretches 12 months to 16. With revenue it stretches further, because the whole saving comes off a smaller net burn: USD 600k of cash, USD 80k burn and USD 30k revenue goes from 12 months to 20.
Burn Rate and Runway — The Single Most Important Number in a Startup
Gross burn, net burn and the runway between them
Gross burn is what leaves the bank in a month; net burn is gross burn minus the revenue that comes in. Runway is cash on hand divided by net burn, in months, and the cash-out date is that many months from today. The tool counts whole calendar months and spreads the fraction at the average month length, so a runway of 1 month from 31 January ends on 28 February, not early March.
That arithmetic assumes burn and revenue stay where they are, which they rarely do. Rising costs from planned hires shorten it, and growing revenue lengthens it. Treat the figure as a snapshot and recompute it every month with the actuals.
"Default alive" is a projection, not this month's numbers
Paul Graham's October 2015 essay "Default Alive or Default Dead?" asks founders one question: assuming their expenses remain constant and their revenue keeps growing at its recent rate, do they reach profitability on the money they have left? The answer depends on the growth rate, which this calculator does not take, so it cannot say whether you are default alive. It used to show "Default Alive" whenever revenue covered burn. That is a narrower and later state, already cash-flow positive, and the tool now calls it that.
To answer Graham's question, project revenue month by month at your recent growth rate against flat costs, and see whether revenue overtakes burn before the cash runs out. The essay links Trevor Blackwell's calculator, which does exactly that.
"Runway is a snapshot. The question that decides a company's fate is whether growth closes the gap before the cash runs out."
Cutting burn, and measuring what the spending buys
A cut to gross burn comes entirely off net burn, so its effect on runway is larger than the percentage suggests whenever revenue is coming in. Use the scenario box to compare cuts before deciding on one. The burn multiple, David Sacks's measure from April 2020, asks the efficiency question instead: net burn ÷ net new annual recurring revenue over a period, or how many dollars are spent for each dollar of new ARR. Lower is better, and Sacks gives rules of thumb by stage. This tool does not take ARR, so it does not compute one.
Where the cash sits matters too. In the United States the FDIC insures deposits up to USD 250,000 per depositor, per insured bank, for each account ownership category, so an operating balance above that at one bank is not fully insured. Other countries' schemes set their own limits.
Runway is cash ÷ net burn, and "default alive" asks a different question
Runway = cash on hand ÷ net burn, where net burn is gross burn minus monthly revenue collected.
"Default alive" (Paul Graham, October 2015): at constant expenses and recent revenue growth, do you reach profitability on the money you have left?
Revenue already covering burn is cash-flow positive, a later state than default alive, and the only one this tool can detect.
Graham's essay links Trevor Blackwell's calculator for the growth projection that answers his question.
A 25% cut with no revenue turns 12 months into 16. With USD 30k of revenue on USD 80k burn, 12 becomes 20.
The burn multiple (David Sacks, April 2020) = net burn ÷ net new ARR. Lower means each dollar spent buys more growth.
The FDIC insures USD 250,000 per depositor, per insured bank, for each account ownership category.
Cash means cash: undrawn credit lines and unpaid invoices do not extend runway until they turn into money in the bank.
Annual prepayments arrive as one large month of cash. Count them when collected for runway, and as 1/12 a month for MRR.
The cash-out date counts calendar months from today in Singapore time, clamped at month end.
Frequently Asked Questions
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Gross burn is total monthly cash outflow — every dollar leaving the bank, including salaries, rent, software, hosting, marketing. Net burn is gross burn minus monthly revenue collected. For pre-revenue startups, gross burn equals net burn. For revenue-generating startups, net burn is the number that actually consumes runway — runway = cash ÷ net burn. Gross burn shows the size of the cost base; net burn shows how fast the cash is actually going.
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Paul Graham's October 2015 essay defines it with a question: assuming expenses stay constant and revenue keeps growing at the rate it has over the last several months, does the company reach profitability on the money it has left? If yes, it is default alive; if not, default dead, and needs to raise or change course. It is a projection that depends on the growth rate. A company whose revenue already covers burn is cash-flow positive, which is a narrower state. That is what this tool can detect, and what it reports.
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There is no rule this page can source, so it will not give one. The arithmetic it can give: work out how long a raise will take you, add a margin for it taking longer, and make sure the runway shown here is longer than both. Recompute monthly, because a runway calculated at last month's burn overstates the time you have if costs are rising.
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No. Runway measures how long the money in the bank lasts. An undrawn credit line is borrowing you have not done, and an unpaid invoice may arrive late or not at all. Count each when it becomes cash. Founders' personal funds are not the company's either.
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It is David Sacks's measure, published in April 2020, not Bessemer's: net burn ÷ net new ARR over the same period. A multiple of 2 means the company burned two dollars for every dollar of new annual recurring revenue it added. Lower is better, and Sacks gives rules of thumb that vary by stage. This calculator does not ask for ARR, so it cannot compute one; divide your period's net burn by your net new ARR to get it.
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Two views, both legitimate. For runway calculation purposes, count cash actually collected — annual contract paid USD 24,000 upfront counts as USD 24,000 of revenue this month for burn purposes, full stop. For investor reporting and operational dashboards, normalise to monthly: spread USD 24,000 across 12 months as USD 2,000 MRR. The runway-calc view answers "how long until cash runs out?", the MRR view answers "how is the business performing?" — both matter, different audiences. This tool uses the runway-calc view; the MRR view is in our MRR Calculator.
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Know the limit first. In the US the FDIC insures deposits up to USD 250,000 per depositor, per insured bank, for each account ownership category, so anything above that at one bank is uninsured if the bank fails. Some providers sweep balances across partner banks to extend coverage; check exactly which banks hold your money. Outside the US, look up your own country's deposit-insurance scheme and its limit.
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This page will not choose for you, but it can show the trade. If the runway is shorter than the time a raise would realistically take, test cuts in the scenario box until it is not. Remember that a cut comes entirely off net burn: when revenue is coming in, a modest percentage can add many months. And recompute after the cut with real numbers, because severance and notice periods usually delay the saving.
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This page does not have a sourced comparison and will not invent one. Salaries are usually the largest line, so burn tracks headcount and local pay. What does not change between markets is the arithmetic: runway is cash ÷ net burn wherever the company is, and the same team costs less where pay is lower.
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Report in the currency your investors use and keep the definitions standard: gross burn, net burn, runway and, if you have recurring revenue, the burn multiple. Be explicit about which you mean when you say "default alive": Graham's projection with your growth rate, not merely revenue covering this month's costs. Clear definitions matter more than matching a benchmark this page cannot source.
Method & sources
How it computes
Net burn = gross burn - monthly revenue collected; runway = cash / net burn (none when revenue covers burn); cash-out date = calendar months from the SGT business day, clamped at month end, fraction at 365.25/12 days. Cut scenario recomputes net burn. RecaBusiness.runway / cashOutDate, tested.
What this tool implements
- The page called revenue covering burn 'Default Alive'. Paul Graham's definition (Oct 2015) is a projection: at constant expenses and recent revenue growth, does the company reach profitability on the money it has left? The tool takes no growth rate, so it now reports 'cash-flow positive' and explains the difference.
- The burn multiple was credited to Bessemer; it is David Sacks's (23 Apr 2020), net burn / net new ARR. FDIC: $250,000 per depositor, per insured bank, per ownership category. Cash-out date no longer overflows a short month (31 Jan + 1 month was early March).
- Removed as unsourced: Carta time-to-close figures, 18-24 month runway 'canon', YC fundraising-timing advice, burn-multiple thresholds, SVB-era bank lists and US/ASEAN burn comparisons.
Sources
- Graham P. Default Alive or Default Dead? October 2015. http://paulgraham.com/aord.html
- Sacks D. The Burn Multiple. Bottom Up, 23 April 2020. https://sacks.substack.com/p/the-burn-multiple-51a7e43cb200
- Federal Deposit Insurance Corporation. Understanding deposit insurance ($250,000 per depositor, per FDIC-insured bank, for each account ownership category). https://www.fdic.gov/resources/deposit-insurance/understanding-de…
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