Burn rate measures how quickly a company is spending its cash reserves to cover expenses. It is especially important for startups operating before they become profitable. A high burn rate shortens the runway—the amount of time before funds run out—while a controlled burn rate helps ensure long-term sustainability. Monitoring burn rate helps founders make strategic decisions about hiring, product investments, fundraising, and growth pacing.
Glossary · B
Burn rate
The rate at which a company spends its available capital, typically measured monthly, indicating cash flow sustainability.
More terms starting with B
- BacklogA prioritized list of tasks, features, or bugs waiting to be developed or addressed in future sprints.
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- Build automationThe practice of automating the compilation, testing, and deployment of software to reduce manual work and errors.
