Burn rate is the rate at which a company spends cash, typically measured monthly. Gross burn is total monthly spending. Net burn is monthly spending minus monthly revenue. Burn rate determines your runway - how long you can operate before you need to raise, cut, or reach profitability.
Definition
Understanding Burn Rate
Burn rate is the rate at which a company spends cash, typically measured monthly. Gross burn is total monthly spending. Net burn is monthly spending minus monthly revenue. Burn rate determines your runway - how long you can operate before you need to raise, cut, or reach profitability.
Related Concepts
Related Terms
- Runway
- Fundraising
- Unit economics
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