What Is Burn Rate?
What is burn rate? It is the rate at which a company spends its cash reserves each month, before becoming profitable. Gross burn is total monthly spending; net burn subtracts revenue to show the net cash consumed. Both matter for calculating how long the current cash will last.
Calculate gross and net burn rate from your P&L export and project runway with your current cash balance
Drop your file in and ask a question — no account needed.
Upload your spreadsheet.xlsx .xls .csv — free to try, no accountWhat this export contains
| Date |
| Revenue |
| Payroll |
| Rent |
| Software |
| Marketing |
| COGS |
| Other Expenses |
| Total Expenses |
| Cash Balance |
What usually goes wrong with it
Gross and net burn get confused in financial reports
Gross burn is total spending regardless of revenue. Net burn subtracts revenue. A company with $200K monthly expenses and $80K revenue has a $200K gross burn but a $120K net burn. Reporting the wrong one to investors changes the runway calculation significantly.
DataMimi Datamimi calculates both gross and net burn from the same P&L export by summing the Expenses columns and subtracting the Revenue column, labeling each result clearly.
Burn rate spikes that are non-recurring distort the monthly average
A month with a one-time legal fee of $50K inflates the monthly average if included without normalization. Using a 3-month rolling average captures the true run rate better than any single month.
DataMimi It calculates a rolling 3-month average burn rate alongside the monthly figures, flagging months where a one-time expense inflated the single-month number.
Runway calculation requires knowing the current cash balance
Runway = Cash Balance ÷ Net Monthly Burn. If the cash balance lives in a bank export and the burn rate lives in a P&L, calculating runway requires joining two separate files by date — a step that often gets skipped in informal reporting.
DataMimi Datamimi joins the P&L export with a cash balance file by Date column and calculates runway in months from the most recent cash balance and average net burn.
Common questions
What is burn rate as a formula?
Gross burn = Total monthly expenses. Net burn = Total monthly expenses − Monthly revenue. Runway = Current cash balance ÷ Net monthly burn. All three require consistent period definitions to be comparable.
What is a healthy burn rate for an early-stage startup?
Burn rate is healthy relative to runway and growth rate, not as an absolute number. A common investor heuristic is 18+ months of runway at current burn. High burn with proportionally high growth is accepted; high burn with flat growth raises flags.
What is the difference between gross burn and net burn?
Gross burn is total cash spent in a month before any revenue. Net burn is gross burn minus revenue. A company with $300K gross burn and $100K revenue has a $200K net burn and a runway that extends 50% further than gross burn would suggest.
What does Datamimi cost?
Free: $0/month, 40 credits, no credit card required. Lite: $9/month, 400 credits. Starter: $24/month, 1,500 credits, up to 3 simultaneous files. Pro: $59/month, 5,000 credits with rollover. Team: $199/month, 20,000 credits, 5 users.
Try it with your own file
DataMimi reads the file you actually have — merged cells, headers below row one, totals pasted at the bottom — and shows which rows and columns every number came from.
Ask about your file