Understanding SaaS Burn Rate
Burn rate measures how quickly your startup consumes cash. For venture-backed companies, understanding burn rate is critical for planning fundraises, managing runway, and achieving profitability milestones. This calculator helps you model up to 24 months of cash flow, track the efficiency of your spending with burn multiple metrics, and plan capital events like funding rounds or major one-time expenses.
The simulator projects your cash position month-by-month, factoring in revenue growth, expense growth, and any capital events you add. Use it to answer critical questions like "How many months of runway do we have?" and "When should we start our next fundraise?"
How to Use This Tool
Set Starting Cash
Enter your current cash on hand. This is your starting position for the 24-month projection.
Enter Monthly Revenue
Input current monthly recurring revenue (MRR). The simulator applies your growth rate to project future months.
Enter Monthly Expenses
Input total monthly operating expenses including payroll, rent, software, and all other costs.
Set Growth Rates
Configure revenue growth rate and expense growth rate. These compound monthly to project your trajectory.
Add Capital Events (Optional)
Model funding rounds, large purchases, or one-time revenue events at specific months in your projection.
Understanding Your Inputs
Starting Cash
Total cash and cash equivalents available today. Include bank balances and liquid investments.
Monthly Revenue (MRR)
Current monthly recurring revenue. For non-SaaS, use average monthly revenue.
Monthly Expenses
Total operating expenses per month including payroll, rent, software, marketing, and overhead.
Revenue Growth Rate
Expected month-over-month revenue growth percentage. 5% monthly = ~80% annual growth.
Expense Growth Rate
Expected month-over-month expense growth. Set lower than revenue growth to improve margins over time.
Key Metrics Explained
Gross Burn
Total monthly expenses regardless of revenue. This shows your cost structure before any revenue offsets.
Net Burn
Expenses minus revenue = actual cash consumed per month. Negative net burn means you're profitable.
Runway (Months)
How long until you run out of cash at current burn rate. Start fundraising at 6-9 months remaining.
Burn Multiple
Net Burn ÷ Net New ARR. Below 2x is excellent, 2-4x is acceptable, above 4x is inefficient.
Cash Runway Projection
24-month cash flow forecast with configurable revenue and expense growth rates.
Burn Multiple Tracking
Track capital efficiency with industry-standard burn multiple metrics (Net New ARR / Net Burn).
Capital Event Planning
Model funding rounds, one-time expenses, or revenue contracts at specific months.
Pro TipPlan for 6-9 Months Buffer
Fundraising typically takes 3-6 months from first meeting to wire. Start your raise when you have 9-12 months of runway remaining to avoid desperation pricing. Use capital events to model different funding scenarios and their impact on runway.
Startup Cash Burn Rate Data
What is it?
Burn Rate measures how quickly a company consumes its cash reserves before generating positive cash flow. It is a critical metric for startups to determine their cash runway and fundraising timeline.
The Formula
How to calculate: Starting Cash Balance - Ending Cash Balance (over a specific period)
Industry Benchmarks
Frequently Asked Questions
Gross burn is the total amount of money a company spends each month, regardless of revenue. Net burn is the actual amount of cash the company loses each month (Total Expenses minus Total Revenue). Net burn determines your actual cash runway.
Founders should begin fundraising when they have 9 to 12 months of runway remaining. Fundraising typically takes 3 to 6 months, and attempting to raise with less than 6 months of cash severely reduces leverage and valuation.