Burn rate is the rate at which a startup spends cash beyond what it generates from operations, expressed as monthly cash consumption. A startup spending $200,000 monthly with $0 revenue has a $200K monthly burn; with $50K revenue, burn is $150K. Combined with cash on hand, burn determines runway (cash / burn = months of survival). $3M cash with $150K monthly burn = 20 months runway. Startups typically aim for 18-24 months runway before next funding round. Watch gross burn (total spend) vs. net burn (spend minus revenue). Investors evaluate burn relative to growth, customer acquisition cost, and unit economics.
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ARR
Annual Recurring Revenue (ARR) is the annualized value of subscription contracts — the standard metric for SaaS businesses.…
Break-Even Point
Break-even point is the level of sales where total revenue equals total costs — zero profit, zero loss.…
Budget vs Actual
Budget vs Actual (BvA) variance analysis compares budgeted financial performance to actual results, identifying gaps and their drivers.…
Burn Multiple
Burn Multiple is a venture capital metric: Net Cash Burn / Net New ARR — measuring how efficiently…
CAC
Customer Acquisition Cost (CAC) is total sales and marketing spend divided by new customers acquired in a period.…
CAGR
Compound Annual Growth Rate (CAGR) is the constant annual growth rate that would take a starting value to…
Burn Rate
August 22, 2026 · Aditya Gupta
Corporate Finance
Related terms
ARR
Annual Recurring Revenue (ARR) is the annualized value of subscription contracts — the standard metric for SaaS businesses.…
Break-Even Point
Break-even point is the level of sales where total revenue equals total costs — zero profit, zero loss.…
Budget vs Actual
Budget vs Actual (BvA) variance analysis compares budgeted financial performance to actual results, identifying gaps and their drivers.…
Burn Multiple
Burn Multiple is a venture capital metric: Net Cash Burn / Net New ARR — measuring how efficiently…
CAC
Customer Acquisition Cost (CAC) is total sales and marketing spend divided by new customers acquired in a period.…
CAGR
Compound Annual Growth Rate (CAGR) is the constant annual growth rate that would take a starting value to…
