What Is A Good Burn Rate?

What Is A Good Burn Rate?
Share

1 Answer

  1. Burn rate is a rate at which a company spends money. This parameter is very critical for startups as it reflects whether a company will survive or not, it is a key indicator of company’s financial health.
    Regardless of its situation, any company should have a burn rate that ensures at least six months of cash runway. Any less than that and you may not be prepared for unexpected changes in revenue or spending.
    It simply means that to have a good burn rate you should have a lot of cash in the bank, a strong line of credit, growing revenue sources and support from venture capital. These are some important factors that will keep your startup financially healthy.

    • 0