The terms
- Gross burn — total monthly spending.
- Net burn — spending minus revenue: the cash you actually lose each month.
- Runway — months until cash runs out. With growth, runway is longer than cash ÷ net burn suggests — or shorter if costs grow faster than revenue.
Want this as a live monthly model with board-ready reporting? See Virtual CFO services and the startup funding guide.
Frequently asked questions
How do you calculate startup runway?
Divide cash in the bank by monthly net burn (expenses minus revenue) for a quick estimate; for accuracy, project revenue and expenses month by month with their growth rates until cash runs out.
What is the difference between gross burn and net burn?
Gross burn is total monthly spending; net burn is spending minus revenue — the actual monthly decrease in cash.
When should a startup start fundraising?
Fundraises often take three to six months to close, so many founders start with nine to twelve months of runway remaining.