Also called: Gross cash burn
TL;DR
Total monthly operating cash outflow before subtracting any revenue or financing inflow.
Gross burn is the total amount the company spends each month on payroll, software, marketing, hosting, rent, and everything else. Unlike net burn, it doesn't credit revenue. Gross burn captures the company's true cost base, useful for stress-testing what happens if revenue drops materially.
In worst-case planning, the difference between net and gross burn matters: if revenue suddenly halves, the company would burn at close to gross-burn rate.
Gross Burn = Total Cash Operating Expenses
Gross burn equals net burn when there is no revenue; it's the worst-case runway calculation if revenue collapsed tomorrow.
Monthly gross burn $720k, if revenue went to zero tomorrow, the company would burn $720k/mo against $4.5M cash → 6.3 months survival. The same company's net burn of $410k → 11 months survival at current revenue.
Gross burn shows up in stress-test models and worst-case scenarios in diligence.
Monthly cash outflow minus cash inflow, the actual rate at which the cash balance is depleted.
The rate at which a company spends cash, typically reported monthly. Reported as either gross burn or net burn.
The number of months the current cash balance will last at the current net burn rate before the company runs out of money.
Net new ARR divided by net burn, the dollars of capital consumed per dollar of new ARR generated.
A SaaS health benchmark: revenue growth rate plus profit margin should sum to at least 40%.
Long-form deep dives on the slides Gross Burn most often shows up on.
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