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Founder Burn Calculator

The Founder Burn Calculator calculates gross burn and net burn from monthly cash operating activity. Gross burn is total monthly cash operating outflow, while net burn subtracts monthly cash inflows and shows the amount by which cash decreases during the month.

Founders can use both figures to understand the cost base and the actual cash draw. Gross burn is useful for expense discipline; net burn connects expenses with revenue and collections. This calculator focuses on operating cash flow and excludes financing inflows unless entered as other monthly cash inflows.

Monthly cash activity

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Result
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Monthly net burn
Gross burn—
Total operating inflows—
Net burn as share of gross burn—

1. Enter payroll cash cost
Include salaries, payroll taxes, benefits, and other payroll-related cash payments for the month.

2. Enter other operating costs
Add rent, software, marketing, contractors, and other operating cash outflows.

3. Enter monthly cash revenue
Use cash collected during the month, not merely invoiced revenue.

4. Add other operating inflows
Include recurring operating inflows not already captured as cash revenue.

5. Review gross and net burn
The main result shows net burn, while the details separate total costs from inflows.

Gross burn = Payroll cash cost + Other operating cash costs. Net burn = Gross burn − Cash revenue − Other operating inflows.

What the result means

Net burn is the monthly decrease in cash caused by operating activity when outflows exceed inflows.

A negative net burn means the entered monthly operating inflows exceed operating cash costs.

Given: $110,000 payroll, $70,000 other operating costs, $95,000 cash revenue, and $5,000 other operating inflows.

Calculation: Gross burn = $110,000 + $70,000 = $180,000. Total inflows = $100,000. Net burn = $180,000 − $100,000 = $80,000.

Result: Monthly net burn is $80,000.

Is gross burn the same as total company expense?

Not always. Gross burn focuses on cash operating outflows and may differ from accounting expense because of noncash items and payment timing.

Should a funding round be counted as an inflow?

Usually no when measuring operating burn. Financing proceeds should be tracked separately from operating revenue and collections.

What does negative net burn mean?

It means operating cash inflows exceeded operating cash costs for the period, producing positive operating cash generation in this simplified view.

Can burn be calculated quarterly?

Yes, but use quarterly amounts consistently. Divide by three only if you want a monthly average.

How does burn connect to runway?

Runway divides available cash by positive monthly net burn. Changes in burn therefore directly change the estimated cash horizon.