Burn Rate

Burn Rate is a measure that shows how quickly a business consumes cash. It is particularly relevant for startups that are not yet profitable, as it allows you to calculate how much time is left before the company runs out of funds (or runway). A distinction is made between “gross burn” (total expenses) and “net burn” (net loss after income). Understanding and managing the Burn Rate is crucial to ensure the survival of the business, especially during periods of expansion or seeking financing.

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