What is Burn Rate?
Rate at which a company consumes cash reserves.
How to calculate it
Calculate Burn Rate as: Cash spent per month (net). Pull the inputs from your connected data and track the trend over time in your dashboard.
Examples
Example 1
You start with $1.2M and end the month at $1.05M -> $150k net monthly burn.
Example 2
A startup starts the month with $1.5M and ends with $1.3M -> $200k net monthly burn, implying careful runway monitoring against the next raise.
Why it matters
Burn rate is the rate at which a company consumes cash reserves and is a central determinant of runway and fundraising timing for unprofitable businesses. Watching it closely keeps spending aligned with strategy and survival. Confusing gross burn (total spend) with net burn (spend minus revenue) is a common and dangerous error.
Benchmark context
Match burn to your runway target and growth stage; an efficient growth-stage startup keeps net burn aligned with the new ARR it generates (see net burn multiple).
Common pitfalls
Confusing gross and net burn.
Related KPI guides
Turn KPI definitions into governed dashboards
Metricwise helps teams define metrics once, reuse them across dashboards, and ask trusted business questions in plain English.
Get Started