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Burn Rate

Rate at which a company spends its cash reserves each month.

What is Burn Rate?

Burn rate is the speed at which a company uses up its cash reserves, usually expressed as an amount per month. Gross burn is total monthly cash spending, while net burn is spending minus any revenue coming in. Burn rate matters most for startups that are not yet profitable, as it determines how quickly they must raise more money or reach breakeven.

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