Cash burn rate: benchmark for capital consumption

February 14, 2024

The cash burn rate measures the speed at which a startup or company uses up its existing capital before it reaches a positive cash flow. This metric is particularly important for startups in the growth phase, as it provides information on the remaining time in which the company can operate without requiring new funding. Effective control of the cash burn rate is crucial for ensuring financial sustainability and extending the period until the next capital raising round.