Cash Runway and Burn Analyzer
When to use
Use whenever a business needs to know how many months of cash remain at the current spending rate, or wants to evaluate whether current burn is efficient rather than just large. Especially useful before a fundraising conversation, where both runway and burn multiple are among the first things a serious investor will ask about.
What it does
Computes gross burn, net burn, and runway to zero cash via a bundled calculator, and separately computes the burn multiple, net burn divided by net new ARR over the same period, which answers a different and often more important question than runway alone: is this spending actually buying proportional growth, or is a lot of cash producing very little forward progress.
Method
- State monthly revenue and monthly gross burn (total cash outflow) separately — net burn is derived from these, not estimated directly, so errors in either input are visible rather than hidden inside a single net number.
- Run the bundled calculator (
scripts/runway_calc.py) to get net burn and runway to zero cash at the current rate.
- Read runway against real fundraising timelines, not just as a countdown. Under 12 months means a fundraising process should already be underway, accounting for a realistic 4-6 month raise; under 6 months is urgency-level, not routine monitoring.
- Provide ARR at the start and end of the measurement period (typically a quarter) to compute the burn multiple, net new ARR generated over that period against the net cash burned to generate it.
- Read the burn multiple against real benchmarks, not in isolation: under 1x is excellent (net new ARR exceeds net burn), 1-2x is efficient for most stages, 2-3x is acceptable but worth watching, over 3x means a lot of cash is buying comparatively little growth and deserves investigation before it deserves a bigger check size.
- Treat a negative or zero net-new-ARR result as the single most urgent finding in the whole analysis — burning cash while ARR isn't growing at all is a fundamentally different problem than inefficient growth, and the calculator flags it as such rather than trying to compute a burn multiple that isn't meaningful in that case.
- Track both runway and burn multiple over multiple periods, not as a one-time snapshot — a burn multiple trending up over consecutive quarters is a trend worth acting on before it becomes a crisis, not just a number to report once.
Inputs
- Current cash balance
- Monthly revenue and monthly gross burn
- ARR at the start and end of the measurement period, and the period length in months
- Config saved as JSON matching the format documented at the top of
scripts/runway_calc.py
Output format
Gross burn, net burn, and runway to zero cash with an urgency flag if under 12 or under 6 months; net new ARR, total net burn over the period, burn multiple, and a plain-language efficiency read against standard benchmarks.
Example
A company with $4.2M cash and $240K monthly net burn shows a comfortable 17.5-month runway on its own. The burn multiple tells a more specific story: $720K of net burn over the quarter produced $460K of net new ARR, a 1.57x multiple that reads as efficient growth, meaning the spend isn't just sustainable in terms of runway, it's actually buying proportional growth rather than being burned with little to show for it.
Common pitfalls
- Reporting burn only in absolute dollars with no link to the growth it's producing, making it impossible to tell efficient spending from wasteful spending.
- Computing runway once and not refreshing it as burn or revenue changes, missing a deteriorating trend until it's urgent.
- Treating a negative net-new-ARR period as just a low burn multiple instead of flagging it as the more serious, distinct problem it actually is.
1---2name: cash-runway-burn-analyzer3description: Computes runway to zero cash and the burn multiple (net burn divided by net new ARR) via a bundled calculator, the metric that separates spending a lot because growth is fast from spending a lot for very little growth. Use whenever the user wants to know their runway, is preparing for a fundraise, or is evaluating whether current burn is efficient, and especially when burn is discussed only in absolute dollars with no link to how much growth it's actually buying.4---56# Cash Runway and Burn Analyzer78## When to use9Use whenever a business needs to know how many months of cash remain at the current spending rate, or wants to evaluate whether current burn is efficient rather than just large. Especially useful before a fundraising conversation, where both runway and burn multiple are among the first things a serious investor will ask about.1011## What it does12Computes gross burn, net burn, and runway to zero cash via a bundled calculator, and separately computes the burn multiple, net burn divided by net new ARR over the same period, which answers a different and often more important question than runway alone: is this spending actually buying proportional growth, or is a lot of cash producing very little forward progress.1314## Method151. **State monthly revenue and monthly gross burn (total cash outflow)** separately — net burn is derived from these, not estimated directly, so errors in either input are visible rather than hidden inside a single net number.162. **Run the bundled calculator** (`scripts/runway_calc.py`) to get net burn and runway to zero cash at the current rate.173. **Read runway against real fundraising timelines, not just as a countdown.** Under 12 months means a fundraising process should already be underway, accounting for a realistic 4-6 month raise; under 6 months is urgency-level, not routine monitoring.184. **Provide ARR at the start and end of the measurement period** (typically a quarter) to compute the burn multiple, net new ARR generated over that period against the net cash burned to generate it.195. **Read the burn multiple against real benchmarks**, not in isolation: under 1x is excellent (net new ARR exceeds net burn), 1-2x is efficient for most stages, 2-3x is acceptable but worth watching, over 3x means a lot of cash is buying comparatively little growth and deserves investigation before it deserves a bigger check size.206. **Treat a negative or zero net-new-ARR result as the single most urgent finding in the whole analysis** — burning cash while ARR isn't growing at all is a fundamentally different problem than inefficient growth, and the calculator flags it as such rather than trying to compute a burn multiple that isn't meaningful in that case.217. **Track both runway and burn multiple over multiple periods**, not as a one-time snapshot — a burn multiple trending up over consecutive quarters is a trend worth acting on before it becomes a crisis, not just a number to report once.2223## Inputs24- Current cash balance25- Monthly revenue and monthly gross burn26- ARR at the start and end of the measurement period, and the period length in months27- Config saved as JSON matching the format documented at the top of `scripts/runway_calc.py`2829## Output format30Gross burn, net burn, and runway to zero cash with an urgency flag if under 12 or under 6 months; net new ARR, total net burn over the period, burn multiple, and a plain-language efficiency read against standard benchmarks.3132## Example33A company with $4.2M cash and $240K monthly net burn shows a comfortable 17.5-month runway on its own. The burn multiple tells a more specific story: $720K of net burn over the quarter produced $460K of net new ARR, a 1.57x multiple that reads as efficient growth, meaning the spend isn't just sustainable in terms of runway, it's actually buying proportional growth rather than being burned with little to show for it.3435## Common pitfalls36- Reporting burn only in absolute dollars with no link to the growth it's producing, making it impossible to tell efficient spending from wasteful spending.37- Computing runway once and not refreshing it as burn or revenue changes, missing a deteriorating trend until it's urgent.38- Treating a negative net-new-ARR period as just a low burn multiple instead of flagging it as the more serious, distinct problem it actually is.
Natan-Mohart