Glossary
Burn rate
How much more money a business spends each month than it brings in.
If you spend $8,000 a month and make $3,000, your burn rate is $5,000. Divide your cash on hand by that number and you get your runway: the months you have before the business stops existing.
Burn rate is the single most useful number for anyone building something that is not yet profitable, because it converts a vague anxiety into a date. Founders who know their runway make different decisions than founders who do not.