The rate at which a company spends cash each month, usually reported as net burn (cash out minus cash in). Plain-language explainer with examples.
The rate at which a company spends cash each month, usually reported as net burn (cash out minus cash in).
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.
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