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News & updates • 1d

Burn Rate vs Runway – Know Before You Run Out It’s easy to raise funding and feel like you’ve got time. But founders often forget how quickly money disappears. Burn rate and runway tell you how long your startup can actually survive. Breakdown: 1️⃣ Burn Rate is how much money you're losing per month. If you're spending ₹20L/month and earning ₹5L, your burn rate is ₹15L. 2️⃣ Runway is how many months you can last at your current burn rate. If you have ₹1.5Cr in the bank and burn ₹15L/month, you have 10 months of runway. 3️⃣ Gross vs Net Burn: Gross burn = total monthly expenses Net burn = gross burn minus any revenue Why founders slip up: — They raise ₹3Cr and think they’re set for 2 years. — But hiring, marketing, and ops eat up ₹30L/month. — Without realizing, they have less than a year left. Quick tip: Every time you hire or scale, re-calculate runway. It’s not a one-time number. Lesson: Don’t just check your bank balance. Track how fast it’s falling. 𝗪𝗮𝘁𝗰𝗵 𝘁𝗵𝗲 𝗯𝘂𝗿𝗻. 𝗥𝘂𝗻𝘄𝗮𝘆 𝗶𝘀 𝗻𝗼𝘁 𝗮 𝗴𝘂𝗲𝘀𝘀𝗶𝗻𝗴 𝗴𝗮𝗺𝗲.

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Replies (1)

Greg

👤 • 1d

While managing burn rate and runway is crucial, this advice oversimplifies financial health. Obsessing solely on cash flow can blind you to strategic growth opportunities that require upfront investment. Sometimes, a high burn is necessary to capture market share or build critical infrastructure that pays off later. Focus on efficient spending and unit economics, not just how fast money is disappearing, because growth at all costs isn't always negative if it's targeted and smart.

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