Burn rate is the speed at which a company spends cash beyond what it earns, usually measured monthly. Gross burn is total monthly spend; net burn is spend minus revenue. Burn rate, paired with cash on hand, determines runway, the time before a company runs out of money.

Burn rate sets the clock on every decision you make. It defines your runway, and the runway defines how many bets you get before you must raise or be profitable. Marketing spend is often the largest controllable burn, so its efficiency, your CAC, and payback directly extend or shorten your runway.

Example:

 A company holds $1,200,000 in cash and net burns $100,000 a month. Runway is 12 months.

What is the difference between gross and net burn?

 Gross burn is the total monthly cash spending. Net burn subtracts revenue, showing the actual monthly cash loss.

How does marketing affect burn rate?

 Marketing is often a large share of controllable spend. Efficient acquisition lowers net burn and extends runway; wasteful spend shortens it.