How much runway should we have?

18-24 months is the current investor expectation post-2023. Below 12 months you're in fundraise mode; above 30 months you may be underinvesting in growth.

Should we raise before we need to?

Yes — always fundraise from a position of strength (12+ months runway). Fundraising with <6 months forces bad terms.

How often should we review burn?

Monthly at minimum. Weekly during active fundraise or turnaround. Anchor to a rolling 6-month forecast, not last month's number in isolation.

Burn Rate: What It Is, What Investors Ask, and What to Cut

Q: How often should we review burn?

Monthly at minimum. Weekly during active fundraise or turnaround. Anchor to a rolling 6-month forecast, not last month's number in isolation.

Burn rate is the monthly cash consumption that determines runway. Here's how to calculate it, benchmark it, and reduce it responsibly.

Burn Rate for Startups

Burn rate is not a strategy — it's a symptom. High burn without matching growth signals a broken business. Low burn without any progress signals a company that's not trying. The number matters less than what's producing it.

Gross vs. net burn

Gross burn is total monthly spend. Net burn is gross burn minus revenue. Investors mostly care about net burn — it's what determines runway. Report both.

Healthy burn multiple by stage

Burn multiple = net burn / net new ARR. Pre-seed: not meaningful. Seed: <3x is fine. Series A: <2x is good, <1x is great. Series B+: <1.5x expected. Above 3x sustained means the model isn't working — cut before raising.

What to cut first

Ads without clear payback (usually the fastest 20%). Software subscriptions no one champions. Contractor spend that isn't shipping. Office space > actual need. Last resort: people — but done cleanly, once, not repeatedly.

What NOT to cut

Engineering capacity that ships the roadmap. Customer-facing headcount if churn will follow. The narrow marketing channel that's actually working. Cutting these to hit a number kills the future for a short-term optic.

Frequently asked questions

How much runway should we have?: 18-24 months is the current investor expectation post-2023. Below 12 months you're in fundraise mode; above 30 months you may be underinvesting in growth.
Should we raise before we need to?: Yes — always fundraise from a position of strength (12+ months runway). Fundraising with <6 months forces bad terms.
How often should we review burn?: Monthly at minimum. Weekly during active fundraise or turnaround. Anchor to a rolling 6-month forecast, not last month's number in isolation.

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•By Alejandro Cremades