At a net burn of $20,000 a month, your $200,000 lasts about 10 months. That is below the 12 to 18 month buffer most investors expect, so plan a raise or a path to lower burn soon.
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Burn rate is how fast your company spends cash, and runway is how long that cash lasts at the current pace. The two numbers decide most early-stage decisions: when to raise, when to hire, and when to pull back. The calculator above turns your balances and monthly figures into a clear runway in seconds. Below is how the math works and how to extend it.
There are two burn numbers, and people mix them up constantly. Gross burn is your total monthly cash outflow, your expenses, before any revenue is counted. Net burn is what you actually lose each month after revenue: expenses minus revenue. If you spend $35,000 a month and bring in $15,000, your gross burn is $35,000 and your net burn is $20,000. Net burn is the one that matters for survival, because revenue offsets part of what you spend.
The cleanest way to measure net burn is straight from your bank statements. Take the cash you had at the start of a period, subtract the cash at the end, and divide by the number of months. Going from $260,000 to $200,000 over three months is (260,000 minus 200,000) divided by 3, or $20,000 of net burn per month. That method captures one-off costs your monthly profit-and-loss might miss, which is why the calculator prefers it when you supply start and end balances.
Cash runway is how many months you can keep operating before the money runs out, assuming burn holds steady. The formula is simple: cash in the bank divided by net burn. With $200,000 in the bank and $20,000 of net burn, you have ten months of runway. The moment your revenue meets or beats your expenses, net burn drops to zero or below, and runway becomes effectively infinite, because you are no longer drawing down the balance at all. That is the goal: get net burn to zero before the runway does.
Most investors want to see 12 to 18 months of runway after a raise, because closing a round takes months and you never want to fundraise from a position of desperation. If your runway is shorter than that, the calculator flags it so you can act while you still have options.
You only have two levers: spend less or earn more. Cutting burn buys time but caps growth, so the better move is usually to grow revenue without growing spend at the same rate. This is where the channel you choose matters. Paid ads burn cash every single month; the day you stop paying, the traffic stops too, and your burn does not improve. Organic search works the opposite way: the content and authority you build keep producing visits and revenue long after the work is done, so each month of effort compounds instead of resetting. Over a year, that turns a fixed marketing spend into an asset that lowers your effective burn rather than a cost that repeats forever. If your runway is tight and you want growth that keeps paying back, book a free growth call and we will map the fastest compounding path for your numbers.
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