Burn Rate

Burn Rate

The rate at which a company spends cash each month, usually reported as net burn (cash out minus cash in).

What Burn Rate means

Gross burn is total monthly spend. Net burn subtracts revenue. Investors focus on net burn because it determines runway. A company burning $200K net per month with $2.4M in the bank has 12 months of runway.

Burn discipline is a signal in itself. Investors read burn against the milestones it's buying — the same $200K burn is either great or terrible depending on what it produces.

Related fundraising guides (40)

• Burn Rate
• Rate Limiting
• Burn Rate vs Runway
• Investor Response Rate Benchmark 2026
• CAC (Customer Acquisition Cost)
• Cap Table
• Convertible Note
• Dilution
• Discount (SAFE / Note)
• Due Diligence
• Friends and Family Round
• Gross Margin
• KPI (Key Performance Indicator)
• Liquidation Preference
• LTV (Customer Lifetime Value)
• MFN Clause (Most-Favored Nation)
• MRR (Monthly Recurring Revenue)
• Option Pool
• Oversubscribed Round
• Post-Money Valuation
• Pre-Money Valuation
• Pre-Seed Round
• Pro-Rata Rights
• Revenue Multiple
• Roll-Up Vehicle (RUV / SPV)
• Runway
• SAFE (Simple Agreement for Future Equity)
• Seed Round
• Series A
• Series B
• Term Sheet
• Valuation Cap
• Vesting
• Go-to-Market
• Grant Funding
• Grants vs Equity
• Grants vs VC
• GraphQL vs REST
• Gross Margin
• Growth Loops

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