Investor question 23 of 50 · Costs, burn & runway
“What's your monthly burn?”
Short answer: the investor is really asking how fast are you spending? Answer in three steps: (1) give net burn (cash out minus cash in) for the last 3 months; (2) give gross burn if asked; (3) explain the trend.
What they're really asking
How fast are you spending? Investors rarely care about the question on its own. They're testing whether you know your numbers cold, whether your assumptions are honest, and whether you can explain them simply.
How to answer, step by step
- Give net burn (cash out minus cash in) for the last 3 months.
- Give gross burn if asked.
- Explain the trend.
An example answer
Net burn averages about $21k a month over the last three months.
Figures are from Loopdesk, the fictional SaaS company in our sample files. Swap in your own numbers and keep the structure.
The answer that loses trust
Avoid
Confusing gross and net burn.
Where the proof lives
Before the meeting, find the number behind your answer. In our workbooks it lives in: Runway & Burn, Unit Economics - Efficiency. If you can open that tab and point to it, the follow-up question is easy.