Free founder tool
Burn rate and runway calculator for startups
Burn rate is how fast a startup spends its cash; runway is how many months that cash will last. Every founder should know both numbers, because they decide when the next round has to close.
- Gross burn (monthly)
- ₹15 lakh
- Net burn (monthly)
- ₹10 lakh
- Runway
- 20 months
- Cash runs out around
- Jun 2028
The formulas
Example: ₹2 crore in the bank, ₹5 lakh of monthly revenue and ₹15 lakh of monthly expenses means a net burn of ₹10 lakh and 20 months of runway. If revenue grows 2% a month, runway stretches to almost 23 months. If it grows 5% a month, revenue overtakes costs before the cash runs out: the company is "default alive".
- Gross burn = total monthly operating expenses.
- Net burn = monthly expenses − monthly revenue.
- Runway (months) = cash in the bank ÷ net burn, when burn stays flat.
How much runway is enough
Raising usually takes three to six months, so founders aim to start a round with at least 9–12 months of runway left and to raise enough for 18–24 months. Under six months of runway, the company is negotiating from weakness and should cut burn or find bridge money.
Ways to extend runway
- Cut costs that don't drive growth, starting with the largest lines.
- Bring revenue forward: annual prepaid plans, faster collections.
- Delay hires and renegotiate large contracts.
- Consider non-dilutive money such as grants, revenue-based financing or venture debt.
Related reading: Revenue-based financing vs venture debt: which fits your startup and Startup funding stages: pre-seed to Series C, explained.
Frequently asked questions
- What is a good burn rate?
- There is no single number: what matters is what the burn buys. Investors look at burn multiple (net burn ÷ net new revenue); below about 1.5x is generally considered efficient.
- Should I use gross or net burn for runway?
- Net burn, because revenue offsets spending. Watch gross burn too: it is what you would spend if revenue fell.
- What does default alive mean?
- That on current growth and costs, a company reaches profitability before its cash runs out, without raising again.
- How often should I recalculate runway?
- Monthly, after closing the books, and whenever a large hire, contract or fundraise changes the numbers. Many founders share it with their board every month.
- Does runway include money promised but not received?
- No. Count only cash in the bank. Treat signed term sheets and expected receivables as upside until the money arrives.
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All calculators →Results are estimates for planning and learning, based only on the numbers you enter. They are not financial, tax or investment advice.