Burn rate is the speed at which a company — typically a startup or early-stage business — is spending its available cash reserves to fund operations before reaching profitability or generating positive cash flow. Expressed as a monthly figure (gross burn rate = total monthly cash outflow; net burn rate = monthly cash outflow minus revenue), burn rate determines a company's 'runway' — the number of months before it runs out of cash and needs to raise additional capital. For investors tracking listed new-age companies or pre-IPO startups on Ventura Securities, burn rate analysis is critical for assessing the sustainability of a company's business model, its capital efficiency, and the likelihood of future dilutive fundraising that could impact share price.
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