Burn Rate Calculator
Burn rate is the monthly cash you consume. This calculator computes gross burn, net burn, and, if you enter ARR, Bessemer's burn multiple.
Optional
Optional. Enables burn multiple.
The formula
Net burn per month is (starting cash minus ending cash) divided by months elapsed. Gross burn adds revenue back. Burn multiple is net burn annualised, divided by ARR.
FAQ
What is a good burn multiple?+
Under 1 is elite. 1 to 2 is very good. 2 to 3 is fine at seed. Above 3 signals a growth-efficiency problem.
Is burn multiple annual or monthly?+
Annual: annualised net burn divided by net new ARR (or ARR itself, depending on how you scope it). We use net burn annualised divided by ARR as the simple approximation.
Why does gross burn matter separately?+
It exposes the cost base. Net burn can hide a bloated cost structure if revenue is temporarily inflated.
How often should I re-measure?+
Monthly. Comparing quarters smooths out spikes.
Does capex count?+
Yes for cash burn purposes. If you bought a server this month, it left the bank this month.