Burn Rate

A twentieth-century business coinage using "burn" as a metaphor for consuming cash the way an engine consumes fuel. "Rate" fixes it to a period, typically monthly. The word gained currency in the startup and venture world, where spending faster than you earn is normal and closely watched.

  1. noun phrase · /burn rayt/

    The speed at which a company spends its cash reserves, usually measured per month.

    The pace of consumption behind the balance, so a founder feels money leaving, not just sitting.

    After the new hires, their burn rate jumped to two hundred thousand a month.

    Burn rate is the spending speed; runway is how long that speed can last given the cash on hand. Cutting burn rate is the fastest lever to extend runway when raising more money isn’t an option.