# Burn Rate

*Startups & Venture Capital — Finicade finance glossary*

Burn rate is how much cash a company consumes per month. Gross burn is total spending; net burn subtracts revenue and is the number that matters. It's the denominator of runway, and the reason startup finance is dominated by one arithmetic exercise: cash in the bank divided by net burn, watched monthly by every founder and board member.

**Formula:** `Net burn = Monthly cash out − Monthly cash in`

**Also known as:** net burn, gross burn, cash burn

**Related terms:** [Runway](https://finicade.com/glossary/runway), [Unit Economics](https://finicade.com/glossary/unit-economics), [Cash Flow](https://finicade.com/glossary/cash-flow), [Bridge Round](https://finicade.com/glossary/bridge-round), [Seed Round](https://finicade.com/glossary/seed-round)

Source: https://finicade.com/glossary/burn-rate