Startup Finance

Burn Rate

The rate at which a startup spends its cash reserves before generating positive cash flow.

What does Burn Rate mean?

Burn rate is typically expressed as a monthly figure. Gross burn rate is the total monthly cash outflow, while net burn rate subtracts any revenue. For example, if a startup spends AED 200,000/month and earns AED 50,000/month, the net burn rate is AED 150,000/month. Runway is calculated by dividing remaining cash by the net burn rate. Startups in the MENA region typically target 18-24 months of runway between funding rounds.