Startup Runway and Burn Rate Calculator
Enter your cash, what you spend and what comes in each month to see your burn rate, how many months of runway you have and when the money runs out.
All the cash you can spend today.
Usually today. Month 1 starts on this date.
Everything that goes out: salaries, rent, software, marketing, loan payments.
Payroll includes your own pay and employer taxes. Leave any line blank if it does not apply.
Cash that actually comes in from customers. Leave blank or 0 if you have none yet.
A yearly rate is turned into a monthly one by compounding: 50% a year is 3.44% a month.
Month 1 is the month you start from. Hire costs stay flat; they are added on top of your costs.
How long you want the cash to last. We show what to cut each month, or raise, to get there.
Cash in the bank, month by month
Month-by-month cash plan
| Month | Revenue | Costs | Net burn | Cash at the end |
|---|
How your runway is worked out
Take what you spend, subtract what comes in, and see how many months your cash covers.
- 1
Add up spending
each month$60,000 gross burn
- 2
Take off revenue
$60,000 − $20,000= $40,000 net burn
- 3
Divide the cash
$500,000 ÷ $40,000= 12.5 months
- 4
Find the date
today + 12.5 monthscash runs out
Read more: the formula, worked examples, growth, hires, fundraising and default alive
Runway is how many months a business can keep going on the cash it has before it needs more money. Burn rate is how fast that cash goes. Founders, investors and boards watch both every month: they decide when to raise, when to hire and when to cut back.
The formula
gross burn = everything you spend in a month
net burn = gross burn − revenue that month
runway (months) = cash in the bank ÷ net burn
run-out date = start date + runway
with growth: cash at the end of each month = cash at the start + money raised − net burn that month; runway is the point where it reaches zero
to reach a target runway: cut each month = the largest (− cash at month m ÷ m), or raise = the largest shortfall, for every month up to the target
Worked example
You have $500,000 in the bank and spend $60,000 a month: $40,000 payroll, $6,000 rent, $3,000 software, $8,000 marketing and $3,000 for everything else. Customers pay you $20,000 a month.
- Gross burn = $40,000 + $6,000 + $3,000 + $8,000 + $3,000 = $60,000 a month.
- Net burn = $60,000 − $20,000 = $40,000 a month.
- Runway = $500,000 ÷ $40,000 = 12.5 months.
- Starting on 1 Jan 2027, 12 months takes you to 1 Jan 2028, and half of January's 31 days is 15.5, so the cash runs out around 16 Jan 2028. Start raising at least 6 months earlier, by about 16 Jul 2027.
Target of 18 months: 18 × $40,000 = $720,000 is needed, so you are $220,000 short. Or cut net burn to $500,000 ÷ 18 = $27,777.78 a month, a cut of $40,000 − $27,777.78 = $12,222.22 a month.
Example with growth
Same start, but revenue grows 10% a month and costs grow 2% a month. In month 2 costs are $60,000 × 1.02 = $61,200 and revenue is $20,000 × 1.1 = $22,000, so net burn falls to $39,200 and cash ends the month at $420,800. Burn keeps shrinking: by month 15 it is $3,218.76 and cash bottoms out at $97,844.62. In month 16 revenue ($83,544.96) passes costs ($80,752.10), so the company turns profitable before the cash runs out. It is default alive.
| Month | Revenue | Costs | Net burn | Cash at the end |
|---|---|---|---|---|
| 1 | $20,000.00 | $60,000.00 | $40,000.00 | $460,000.00 |
| 2 | $22,000.00 | $61,200.00 | $39,200.00 | $420,800.00 |
| 3 | $24,200.00 | $62,424.00 | $38,224.00 | $382,576.00 |
| 15 | $75,949.97 | $79,168.73 | $3,218.76 | $97,844.62 |
| 16 | $83,544.96 | $80,752.10 | −$2,792.86 | $100,637.48 |
Hires and a fundraise
A new hire on $120,000 a year with 25% added for taxes and benefits costs $120,000 ÷ 12 × 1.25 = $12,500 a month from the month they start. A fundraise is added at the start of the month it arrives. With $200,000 in the bank and $40,000 net burn, the cash lasts 5 months; if $300,000 arrives in month 4, you have $80,000 left after month 3, $340,000 after month 4, and the runway grows to ($200,000 + $300,000) ÷ $40,000 = 12.5 months. If the money only arrives in month 8, it is too late: the cash ran out after month 5.
Default alive or default dead
Investor Paul Graham's test: on your current growth and costs, without raising another penny, do you reach profitability before the cash runs out? If yes, you are default alive and fundraising is a choice. If not, you are default dead and must cut costs, grow faster or raise in time. Add revenue and cost growth in Advanced mode and the calculator answers this month by month.
Tips
- Use cash, not invoices. Count revenue when customers pay, and include loan payments and taxes in your costs.
- Average a few months. If one month had a big one-off bill, use a 3-month average for spending.
- Plan for a long raise. 18 to 24 months of runway after a round is a common target, because raising the next one can take 6 months or more.
- Watch the run-out date, not just months. A fixed date makes it easier to plan hires and the next round.
This is a simple cash plan, not financial advice. Real cash flow is lumpy: customers pay late, annual bills land in one month and hires start late. Update it each month with your real bank balance.
Common questions
How do you calculate startup runway?
Runway = cash in the bank ÷ net burn. Net burn is what you spend each month minus the revenue you collect. With $500,000 in the bank, $60,000 of costs and $20,000 of revenue a month, net burn is $40,000 and runway is 500,000 ÷ 40,000 = 12.5 months.
What is the difference between gross burn and net burn?
Gross burn is everything you spend in a month: salaries, rent, software, marketing and the rest. Net burn is gross burn minus the cash that comes in from customers. Runway uses net burn, because revenue pays part of the bills.
How many months of runway should a startup have?
A common rule of thumb is 18 to 24 months after a funding round, because raising the next round often takes 6 months or more. Enter a target runway in Advanced mode to see how much you would need to cut each month, or raise, to reach it.
What does default alive mean?
A startup is “default alive” if, on its current revenue growth and costs, it reaches profitability before the cash runs out, without raising more money. If not, it is “default dead”: it needs to cut costs, grow faster or raise. The calculator checks this month by month when you add growth rates.
How do revenue growth and new hires change runway?
Growing revenue lowers net burn each month, so runway gets longer than cash ÷ today’s burn. Rising costs and new hires do the opposite. The Advanced mode runs a month-by-month cash plan so each of these is counted in the month it happens.
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