Burn Rate

Gross burn is total monthly expenses. Net burn is monthly expenses minus monthly revenue. Net burn is what actually depletes your cash.

Gross burn ignores revenue and counts all spending. Net burn subtracts revenue, showing the real monthly cash drain. A company with strong revenue can have high gross burn but low net burn.

There is no universal number; it depends on your cash and growth. The real question is whether your burn leaves enough runway to hit your next milestone. Burn is only good relative to what it buys you.

Cut non-essential spend, slow hiring, renegotiate tooling, and raise prices to lift revenue. Headcount is usually the biggest lever. Every dollar of burn cut extends your runway.

Not if it funds fast, efficient growth and you have the runway for it. It becomes dangerous when burn rises faster than results, or with no clear path to revenue. Burn without progress is just decline.

Runway equals cash divided by net burn. Lower your burn and runway extends; raise it and the clock speeds up. They are two sides of the same survival math.