What Is Burn Rate? How To Calculate Gross and Net Burn Rate (2023)
When entrepreneurs pitch their startups on the TV program Shark Tank, investors (the “sharks”) hear them out, then hammer them with tough questions. One they always ask is: What’s your burn rate? Burn rate is shorthand for how fast a business is using up its cash. The sharks ask because they know a company’s burn rate is an important metric for understanding the strength of a new venture’s business plan. Here’s what burn rate measures, how to calculate burn rate,…