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Startup Funding Espresso – How To Calculate Burn Rate
How To Calculate Burn Rate Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Burn rate is a key metric investors use to check the health of a startup. Based on the burn rate and cash in the bank, one can calculate how much time the startup has. Here's how to calculate burn rate. Use incoming cash as the first data point. It's a mistake to use revenue as the timing of the cash received is more important than when the orders are booked. Use outgoing cash as the second data point. Again, it's not the expenses on the accounting…
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