Burn Rate (Gross)
Definition
The total cash outflows of a company in a defined period, before any revenue or other inflows are deducted. Gross burn rate represents the full cost of operating the company during that period. Gross burn rate is not the operative figure for cash runway calculation; net burn rate is used for that purpose.
Common Misapplication
The most common misapplication is using gross burn rate as a proxy for net burn rate in runway calculations for revenue-generating companies. For a company receiving material revenue, gross burn overstates the rate at which cash is consumed and produces a shorter runway estimate than the actual position.
FFI Standard Reference
This term is defined and applied in Book 1, Section 1.2: The Cash Management Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Burn Rate (Gross). https://ffistandard.org/glossary/burn-rate-gross/. 2026.