Metrics
Burn Rate
Quick definition
Net cash consumed per month.
Gross burn is total cash out; net burn is cash out minus cash in. When founders say 'burn' they usually mean net burn. Track it monthly and against forecast. A spike in net burn without a matching revenue increase is a warning sign.
Related metrics terms
ARR (Annual Recurring Revenue)
Annualized value of your subscription revenue at a point in time.
MRR (Monthly Recurring Revenue)
Monthly equivalent of ARR, useful for month-over-month tracking.
Net Revenue Retention (NRR)
Revenue from your existing customer base 12 months later, including expansion and churn.
Gross Revenue Retention (GRR)
NRR without upsell — what you keep before expansion.
See this in action
Insights and tools where Burn Rate shows up.
Frequently asked questions
- What is Burn Rate?
- Gross burn is total cash out; net burn is cash out minus cash in. When founders say 'burn' they usually mean net burn. Track it monthly and against forecast. A spike in net burn without a matching revenue increase is a warning sign.
- Why is Burn Rate important for startups?
- Burn Rate is a metrics concept that matters for startup founders because it directly affects fundraising readiness, financial decision-making, or operational discipline at the stage where mistakes are expensive to undo. Founders who understand it have a meaningfully easier time in diligence, board meetings, and investor conversations.
- What category does Burn Rate belong to?
- Burn Rate is a Metrics term in the StartupCFO finance glossary — alongside other metrics concepts that founders, CFOs, and accountants use in daily startup operations and reporting.
- Where can I learn more about Burn Rate?
- Beyond this definition, see the related metrics terms below, or explore StartupCFO's insights and tools that put Burn Rate in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
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