Burn Rate
How fast your startup is spending cash each month.
Definition
Burn rate measures the rate at which a startup spends money beyond its income. Gross burn is total monthly spending. Net burn is spending minus revenue. Combined with your cash reserves, burn rate determines your runway — how many months until you run out of money. Tracking burn rate is fundamental to startup survival.
Why it matters for founders
Running out of cash is the #1 reason startups die. Knowing your burn rate lets you plan fundraising timelines, make hiring decisions, and decide when to cut costs. Investors always ask about burn rate.
Example
A startup has $500K in the bank. Gross burn is $80K/month (salaries, servers, office). Revenue is $15K/month. Net burn = $65K/month. Runway = $500K ÷ $65K ≈ 7.7 months.
How Foundra helps
Foundra's Pricing & Packaging card in the Build phase helps you model revenue against burn rate so you can extend your runway.
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Related terms
Runway
How many months your startup can survive before running out of cash.
Unit Economics
The revenue and costs associated with a single unit of your business (usually one customer).
Monthly Recurring Revenue (MRR)
The predictable revenue your business generates every month from subscriptions.
Break-Even Point
The point where your total revenue equals your total costs, resulting in zero profit or loss.