Burn rate
The rate at which a company spends its available capital, typically measured monthly, indicating cash flow sustainability.
What is Burn rate?
What is Burn rate?
Burn rate measures how quickly a company is spending its cash reserves to cover expenses. It is especially important for startups operating before they become profitable. A high burn rate shortens the runway—the amount of time before funds run out—while a controlled burn rate helps ensure long-term sustainability. Monitoring burn rate helps founders make strategic decisions about hiring, product investments, fundraising, and growth pacing.