Okuzeka
Entrepreneurship & Startups vocabulary · Unit Economics & Metrics

Burn rate

Meaning in entrepreneurship & startups, with examples

/ˈbɜːrn reɪt/nounCore term

In entrepreneurship & startups, burn rate means: The amount of money a startup spends each month beyond what it earns, showing how fast it is using up the cash in the bank.

In Turkish: nakit yakma hızı, aylık nakit tüketimi

How it is used

Used in board meetings, investor updates and budgets. You reduce, cut, control or increase your burn rate; people also just say burn (our burn is 80k a month). Gross burn is total monthly spending; net burn is spending minus revenue.

Example sentences

  1. Our burn rate is about 90,000 dollars a month, mostly salaries.

  2. After the hiring freeze, we cut the burn rate by a third.

Common collocations

  • monthly burn rate
  • reduce the burn rate
  • net burn
  • gross burn
  • high burn
  • runwayThe number of months a startup can keep operating before its cash runs out, usually calculated as cash in the bank divided by monthly net burn.
  • cash flowThe movement of money into and out of a business over a period. Positive cash flow means more money is coming in than going out.
  • revenueThe total money a company earns from selling its products or services in a period, before any costs are taken away.
  • break evenTo reach the point where revenue equals costs, so the company is neither losing money nor making a profit.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Unit Economics & Metrics

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