β Glossary
Burn Rate
The rate at which a company spends its cash reserves before generating positive cash flow.
Gross burn rate is total monthly spending. Net burn rate subtracts revenue: if you spend $50K/month and earn $20K, net burn is $30K. Runway = cash on hand Γ· net burn rate. With $300K in the bank and $30K net burn, you have 10 months of runway. YC advises startups to maintain at least 6 months of runway at all times. When runway drops below 3 months, fundraising becomes your full-time job β and you'll negotiate from weakness.