Burn Rate

Also called Net Burn and Gross Burn

How fast you are spending cash. Gross burn is everything going out each month, net burn is that minus the revenue coming in, the number that actually shortens your runway.

Why it matters

Burn is the lever you control most directly. Watching it, and knowing the difference between gross and net, is how you turn a fixed pile of cash into more time to find your footing.

For example

A startup spends 30 lakh a month and earns 10 lakh, a net burn of 20 lakh that eats into its runway.

Go deeper

Burn Rates: How Much? AVC · article A VC's concrete guardrails for what burn is reasonable at each stage, grounded in real numbers rather than vibes. Open avc.com →

A Half Dozen Lessons About the Right Burn Rate 25iq · article Six sharp lessons on setting burn deliberately, and why burning too little can be as much a mistake as burning too much. Open 25iq.com →

Related terms

Also in Starting Up

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

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