burn-rate-intuition · @rafael

Burn rate (monthly cash outflow) and runway (months until cash runs out) are the two numbers every founder should know at all times.

The common mistake: thinking about runway in terms of current burn, not future burn. If you hire three people today, your runway calculation from last week is wrong. Every hiring decision is a runway decision.

The rule of thumb: raise when you have 6+ months of runway, not when you have 3. Fundraising takes longer than expected and investors smell desperation. The best time to raise is when you don't need to.