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

1. 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.
2. Run the bundled calculator (scripts/runway_calc.py) to get net burn and runway to zero cash at the current rate.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.