Burn rate and runway

Burn rate is the net cash a company spends each month beyond what it brings in. Gross burn is total cash out. Net burn is cash out less cash in. Runway is the cash in the bank divided by the net burn, expressed in months. Together they answer the question every founder and every investor asks first: how long can this company keep going as it is.

The numbers matter in BC because fundraising takes months, and a company that starts a raise with four months of runway is negotiating from weakness. Burn also moves faster than founders expect. Each hire, each tool and each contract changes it, and a hiring plan agreed in the spring can halve the runway by autumn without anyone deciding to do that.

In practice, we calculate burn from the bank rather than from the plan, track it monthly in the investor update, and model it forward alongside the hiring and revenue plans so that the month the cash runs out is always visible. The runway sets the date by which a raise, a cost change or a path to profitability has to be in place, and every other decision is made with that date in view.