All terms
Finance
Net burn
Monthly cash outflows minus monthly cash inflows from revenue.
In plain English
The real damage to your bank account each month after the customers pay you. This is what determines runway.
Example
Gross burn $33k, monthly revenue $11k → net burn $22k.
Formula
Net burn = Gross burn − Monthly revenue
Why it matters
Net burn is the runway-determining number. Cutting net burn (either by reducing gross burn or growing revenue) extends runway proportionally.
Common mistakes
- Counting unpaid invoices as 'revenue' when computing net burn — cash basis only