Net Burn Rate
Total monthly expenses minus total monthly revenue — the actual rate at which cash is being depleted.
Burn efficiency tracks your net burn trend and flags when spending outpaces revenue growth.
What is Net Burn Rate?
Net burn rate is the most accurate measure of how fast your cash is actually decreasing. Unlike gross burn, it accounts for the revenue coming in.
If you spend $100,000 per month but bring in $40,000 in revenue, your net burn is $60,000. That's the number that determines your real runway.
For pre-revenue companies, net burn equals gross burn. As revenue grows, net burn decreases — and when revenue exceeds expenses, net burn goes negative, meaning you're cash-flow positive.
Why it matters
Net burn is what investors actually care about when they ask "what's your burn?" It tells them how quickly you're depleting your capital reserves and whether your revenue trajectory is meaningful.
Tracking net burn over time reveals your path to sustainability. If net burn is decreasing month over month, you're heading toward profitability. If it's increasing despite revenue growth, your expenses are outpacing your revenue.
Formula
Net Burn = Total Monthly Expenses - Total Monthly Revenue
Example
Monthly payroll is $65,000, tools are $7,000, commitments are $8,000. Total expenses = $80,000. Monthly revenue from deals = $25,000. Net burn = $80,000 - $25,000 = $55,000.
How RunwayCal helps
RunwayCal computes net burn automatically from your team costs, tool subscriptions, commitments, and deal pipeline. The burn efficiency section shows net burn trends over time with month-over-month comparisons.
Common mistakes
- 1Reporting gross burn to investors when they ask for burn rate (they usually mean net)
- 2Including one-time revenue (like a large annual contract) in the monthly average
- 3Not adjusting net burn calculations when new hires are planned but not yet started
Track your real burn — not just expenses
RunwayCal factors in your revenue pipeline alongside your costs to show true net burn with month-over-month trends.
See your net burn → Start free