Burn rate.
aka monthly burn, net burn, cash burn
How fast the money is leaving the building, every month.
What it actually means
Burn rate is how much cash a company loses each month: everything it spends minus everything it brings in, measured in actual money leaving the bank account.
There are two flavours. Gross burn is total monthly spending: salaries, rent, software, ads. Net burn is spending minus revenue, which is the number that matters, because a company earning $80,000 a month and spending $130,000 is only burning $50,000.
Burn is not a bad word. Every young company burns; that is what the investment money is for. The problem is burn that buys nothing. Investors ask one question about it: what did the burn produce? Users, revenue, a product that works. If the answer is “a bigger office”, the next round gets harder.
Where you'll hear it
Net burn came in at $210K, up from $160K, because we started the two sales hires in March. That takes runway from 20 months to 15.
Translation: the spend was planned, but the clock just sped up, and everyone should know.
Founders say it casually (“we’re burning about 300 a month”), investors say it sharply (“your burn is too high for your stage”), and press releases never say it at all. In a job interview, “what is your monthly burn and runway?” is a grown-up question that good companies answer without flinching.
The pop-culture version
The percentage is your cash. Burn rate is how fast it drops. Scrolling video with the screen on full brightness is high burn; airplane mode with the screen off is low burn.
Nobody panics at 80%. Everybody does maths at 14%. The trick is knowing your burn before you get there, so you can decide what to turn off while you still have a choice, instead of watching the screen go black mid-sentence.
Companies that manage burn well do exactly what you do with a dying phone: they know which apps are draining it, they kill the ones that are not helping, and they find a charger (revenue or a funding round) before the number gets scary.
Say it like you mean it
“We’re burning $120K a month net, which gives us about 11 months.”
Net burn plus the runway it implies. Complete sentence, no follow-up needed.“Our burn rate is 11 months.”
Burn is money per month. Months is runway. Mixing them up is the classic tell.If someone asks whether burn is “high”, the honest answer is always “compared to what?” $500K a month is reckless for a three-person team and frugal for a 60-person one. Burn only means something next to revenue, stage and runway.
How finance teams model monthly inflows and outflows so the burn number is a forecast, not a surprise.
Decoded next
Decoded by the Kurums editorial team. Kurums Decoded translates the language of business for people who are new to it. Definitions are kept short on purpose; the serious version above goes deep. Nothing here is financial, legal or career advice.
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