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E-commerce Burn Rate & Runway Calculator
Calculate your startup burn rate, cash runway, and projected zero-cash date. Model revenue growth scenarios to plan fundraising and spending.
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How you compare
Your calculated rate against market benchmarks.
Comfortable runway. Focus on growth milestones.
Insights
Personalized analysis based on your inputs.
Good
Over 12 months of runway
With 13 months of runway, you have time to execute without panic. But burn rate should still be monitored monthly.
→ Use this runway to hit growth milestones. Set quarterly checkpoints to reassess burn rate and fundraising timing.
Info
Revenue growth adds ~8 months of runway
At 5% monthly revenue growth, your effective runway extends from 13 to 20 months. Growth is your most powerful runway lever.
→ Protect the growth rate. Cutting marketing to reduce burn can backfire if it slows revenue growth more than it saves.
Good
Break-even projected in month 23
At 5% monthly growth, revenue should exceed expenses in approximately 23 months. After that, the business becomes self-sustaining.
→ Ensure you have enough runway to reach this milestone. If break-even is beyond your runway, you need to either cut burn or raise capital.
How Burn Rate and Runway Calculation Works
Burn rate is the speed at which a startup spends its cash reserves before generating positive cash flow. Gross burn rate is your total monthly spending — salaries, rent, software, marketing, everything. Net burn rate subtracts any revenue you earn: Net Burn = Total Monthly Expenses - Monthly Revenue. If you spend $120,000 per month and earn $40,000, your net burn is $80,000 per month. Net burn is the number that actually determines how long your company can survive.
Runway is the number of months your company can operate before running out of cash: Runway = Cash on Hand / Net Monthly Burn Rate. With $800,000 in the bank and a net burn of $80,000 per month, you have 10 months of runway. This calculation assumes constant burn and constant revenue — neither of which is realistic. Revenue may grow (extending runway) or expenses may spike during hiring pushes (shortening it). Smart founders model multiple scenarios: best case, base case, and worst case.
The relationship between burn rate and fundraising timing is critical. Most fundraising processes take 3-6 months from first meeting to cash in the bank. If you have 10 months of runway, you need to start fundraising at month 4-5 at the latest. Starting with less than 6 months of runway puts you in a weak negotiating position — investors can sense desperation, and terms get worse. The golden rule is to begin fundraising when you have 9-12 months of runway remaining.
Burn rate is not inherently good or bad — it depends on what you are buying with it. A company burning $200,000 per month but growing 20% month-over-month is in a fundamentally different position than one burning $200,000 with flat growth. The metric that matters is burn multiple: Net Burn / Net New ARR. A burn multiple under 1.5x is excellent, 1.5-2.5x is acceptable for early-stage companies, and above 3x signals inefficiency regardless of stage.
Burn Rate Benchmarks by Startup Stage
These ranges represent typical monthly net burn rates for venture-backed startups in the US. Bootstrapped companies typically operate at much lower burn rates by design. Burn rates vary significantly by geography, industry, and business model.
| Segment | Typical Range | Verdict |
|---|---|---|
| Pre-seed (pre-product) | $15,000 - $50,000 / month | Usually 1-3 founders working on MVP; minimal non-salary costs |
| Seed (post-MVP, pre-PMF) | $50,000 - $150,000 / month | Small team of 5-12; focused on finding product-market fit before scaling spend |
| Series A | $150,000 - $500,000 / month | Team of 15-40; investing heavily in go-to-market and engineering |
| Series B | $500,000 - $1,500,000 / month | Team of 40-100+; scaling sales, expanding markets, and building infrastructure |
| Bootstrapped (profitable) | $10,000 - $80,000 / month | Spending constrained to revenue; burn is temporary during growth investments |
| Growth stage (Series C+) | $1,500,000 - $5,000,000+ / month | Aggressive market capture; burn justified only by strong unit economics |
Pre-seed (pre-product)
$15,000 - $50,000 / month
Usually 1-3 founders working on MVP; minimal non-salary costs
Seed (post-MVP, pre-PMF)
$50,000 - $150,000 / month
Small team of 5-12; focused on finding product-market fit before scaling spend
Series A
$150,000 - $500,000 / month
Team of 15-40; investing heavily in go-to-market and engineering
Series B
$500,000 - $1,500,000 / month
Team of 40-100+; scaling sales, expanding markets, and building infrastructure
Bootstrapped (profitable)
$10,000 - $80,000 / month
Spending constrained to revenue; burn is temporary during growth investments
Growth stage (Series C+)
$1,500,000 - $5,000,000+ / month
Aggressive market capture; burn justified only by strong unit economics
Source: EconKit startup benchmark data, compiled from publicly available industry sources, reviewed annually. US-centric figures; burn rates outside North America are typically lower for equivalent stages due to lower compensation and operating costs.
Common Burn Rate Mistakes
Using gross burn instead of net burn for runway calculations
Gross burn ignores revenue entirely, which gives you an overly pessimistic runway estimate if you have meaningful revenue. Conversely, using gross burn when revenue is minimal gives roughly the same answer but can mask the fact that your revenue is not covering any meaningful portion of costs. Always calculate both and understand the gap — the closer net burn is to gross burn, the less your revenue matters to survival.
Assuming burn rate stays constant
Burn rate almost never stays constant. Hiring plans, annual salary increases, new tool subscriptions, and marketing campaigns all increase it. More dangerously, many costs are lumpy — annual insurance premiums, quarterly tax payments, or hardware purchases can cause spikes. Model your burn rate month by month for the next 12-18 months rather than using a single average.
Waiting too long to start fundraising
Founders often assume fundraising takes 4-6 weeks when it typically takes 3-6 months from first outreach to wire transfer. Starting with only 4-5 months of runway means you are negotiating from a position of weakness. If the round does not close on schedule, you face a cash crisis. Begin fundraising when you have at least 9-12 months of runway, and always have a Plan B (bridge round, revenue acceleration, cost cuts) if the timeline slips.
Cutting burn too aggressively and killing growth
When runway gets short, the instinct is to slash costs. But indiscriminate cuts — especially to engineering and sales — can stall growth and make future fundraising harder. Instead, focus on efficiency: cut non-essential expenses first (unused tools, excessive office space, low-ROI marketing channels) while protecting the investments that drive revenue growth and product progress.
Not tracking burn multiple alongside burn rate
Burn rate in isolation is meaningless without knowing what you are getting for it. A company burning $300,000/month and adding $200,000 in net new ARR (burn multiple of 1.5x) is far healthier than one burning $100,000/month with no revenue growth. Track burn multiple monthly to evaluate whether your spending is productive. If burn multiple is consistently above 3x, you are spending inefficiently regardless of absolute burn.
Managing Burn Rate Strategically
Build a month-by-month cash flow model that includes every known and anticipated expense. Map out planned hires, annual renewals, tax payments, and seasonal revenue variations. Stress-test the model: what happens if revenue grows 50% slower than expected? What if a key hire takes 3 months longer? Use these scenarios to set a "default alive" threshold — the point at which you need to change strategy to avoid running out of cash.
Establish a burn rate review cadence. Every month, compare actual burn against your plan and investigate variances. Are costs rising faster than revenue? Are new hires generating expected productivity within the timeline you modeled? Many startups discover that their burn is 20-30% higher than planned simply because they do not track it frequently enough to catch drift early.
If you are venture-backed, align your burn rate with your next fundraising milestone. Work backward from the metrics investors will want to see (typically revenue run rate, growth rate, and net retention) and set a burn level that lets you hit those metrics with at least 6 months of cushion. If you cannot build a credible path to those metrics with your current cash, it is better to have that conversation with your board now rather than when you have 3 months of runway.
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Frequently Asked Questions
What is burn rate and why does it matter for startups?
Burn rate is the speed at which a company spends its cash reserves before generating positive cash flow. It matters because it determines your runway — how many months you can operate before running out of money. Investors and founders track burn rate to plan fundraising timelines and spending decisions.
How do I calculate my startup runway?
Divide your current cash balance by your monthly net burn rate (total monthly expenses minus monthly revenue). For example, if you have $500,000 in the bank and burn $50,000/month net, your runway is 10 months. Factor in revenue growth for a more optimistic projection.
What is a healthy burn rate for a startup?
A healthy burn rate depends on your stage and fundraising status. Early-stage startups typically aim for 18-24 months of runway after each funding round. If your runway drops below 6 months, it is critical to either raise funds, cut costs, or accelerate revenue.
What is the difference between gross and net burn rate?
Gross burn rate is your total monthly spending regardless of revenue. Net burn rate subtracts monthly revenue from monthly expenses, showing the actual cash you lose each month. Net burn is more useful for companies with revenue, while gross burn matters for pre-revenue startups.
When should I start worrying about my burn rate?
Start actively managing burn when your runway drops below 12 months. Below 6 months is critical — you should be fundraising, cutting costs, or both. Also watch for rising burn rates that outpace revenue growth, as this signals unsustainable spending patterns.
How we calculate this
Calculate your startup burn rate, cash runway, and break-even timeline with revenue growth projections. Free, instant, no signup. All formulas are unit-tested and the calculation runs entirely in your browser — no data is sent to a server.
Data sources
- EconKit startup benchmark data (2025)
Last reviewed: . Formulas are unit-tested. Benchmarks are reviewed quarterly. Spotted an error? Let us know .
Cite this calculator
Free to cite in articles, research, and reports. Please link directly to this page so readers can run the numbers on their own inputs.
APA
EconKit. (2026). Burn Rate & Runway Calculator. Retrieved April 17, 2026, from https://www.econkit.com/burn-rate-calculator/MLA
"Burn Rate & Runway Calculator." EconKit, 2026, https://www.econkit.com/burn-rate-calculator/. Accessed April 17, 2026.URL
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