← Glossary
GLOSSARY
Burn rate
How fast you are losing cash each month.
The longer version
Gross burn is total operating spend per month. Net burn subtracts revenue from gross burn. Investors typically care about net burn because that is what shortens the runway clock.
Why it matters in your books
If you do not know your burn rate, you do not know how much time you have. Burn must be calculated on cash basis (real money out the door), not P&L expense, because non-cash items like depreciation distort it.
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