Introduction
Runway is the one number that decides whether your next six months are about building or scrambling. Founders who track cash burn weekly raise on their own terms. Founders who guess get a forced bridge round at terms they hate.
This article walks through gross burn, net burn, and runway with a single worked example you can map to your own numbers. It shows how to pull monthly burn from QBO and Stripe. Then it walks three tactical levers to extend runway: a cost cut, a pricing change, and a bridge round. The numbers below use one fictional SaaS company so the example stays continuous and easy to track.
The Growthy signup at the end of this piece gives you a live runway view, so the close is not a cold ask.
Body
Gross Burn, Net Burn, and Runway: Definitions with Worked Examples
Gross burn is total cash going out the door each month. Rent, payroll, software, contractors. Every dollar that leaves your bank account, regardless of what comes in.
Net burn is gross burn minus cash collected that month. It is the real hole you are filling.
Runway is your cash balance divided by net burn. It tells you how many months you have at the current pace before the bank account hits zero.
Meet Northwind Analytics. A fictional early-stage SaaS at $42K MRR, $135K monthly opex, and $90K monthly cash collected, with $540K in the bank.
Gross burn = $135K. Total opex out the door.
Net burn = $135K minus $90K = $45K. That is the monthly hole.
Runway = $540K divided by $45K = 12 months. Twelve months to break even, raise, or shut down.
Here is the trap. Gross burn looks scary in isolation. But the only metric an investor underwrites is net burn against runway. A high gross burn paired with strong cash-in is a different story than the same gross burn with weak collections.
How to Derive Monthly Burn from QBO and Stripe
You need two numbers each month: total cash out (gross burn) and total cash in. QBO gives you the first one cleanly. Stripe validates the second.
From QBO, pull the Profit and Loss report filtered to the last completed month. The total expenses line is your gross burn input. Then pull the Statement of Cash Flows, or simply sum the bank-feed cash-in entries, for total cash collected that month.
From Stripe, go to Reports, then Balance, then Payout reports for the same month. The net cash settled to your bank account is the Stripe-side cash-in figure. Cross-check it against the QBO bank-feed total. They should match within a few percent.
Two common discrepancies will trip you up. First, Stripe payouts cross month boundaries. A payment captured on the last day of the month often settles two business days later, so it lands in the next month's cash-in. Second, refunds and chargebacks. If you record gross revenue without netting refunds, your cash-in will look higher than what hit the bank.
The fix is simple. Always use cash actually settled, not invoiced revenue, when computing net burn. Invoiced revenue is for the P&L. Cash settled is for runway.
Three Tactical Scenarios to Extend Runway
Back to Northwind Analytics. Twelve months of runway. The CEO wants 18. Here are three levers and the math each one buys.
Cost-Cut Scenario
Pause two non-essential tools and one contractor. Drop a $1.5K per month BI tool you barely use. Pause a $3K per month PR retainer that has not driven a single qualified lead. End a $3.5K per month contract designer once the current sprint ships. Total savings: $8K per month.
New net burn: $45K minus $8K = $37K. New runway: $540K divided by $37K = 14.6 months.
You bought 2.6 months for a Saturday morning of decisions. The trade-off is real, though. Pulling growth spend can also pull pipeline. If the PR retainer was driving any signal at all, you will feel the gap in 60 days.
Pricing-Change Scenario
Raise list price on new logos by 15 percent. Existing contracts honor old pricing through renewal. The blended ARPU lifts from $42K MRR to roughly $46K MRR over 90 days as new deals close at the new rate.
New net burn at $46K MRR collected: $135K minus $96K (after a 90-day ramp) = $41K. New runway: $540K divided by $41K = 13.2 months.
Pricing changes show up slowly because of the renewal cycle. Grandfathering existing customers is a trust move with a measurable ARR cost. You give up some short-term revenue to keep the relationship clean. Worth it most of the time.
Bridge-Round Scenario
Raise $250K at flat terms from an existing investor. A SAFE or convertible note keeps the round light on legal cost. Cash balance jumps from $540K to $790K. At the unchanged $45K net burn, runway extends from 12 to 17.6 months.
A bridge buys time but does not fix the engine. The burn is still $45K. If the next 6 months do not move the metrics that justified the bridge, you are back at the table with a smaller story. Founders forget this. The bridge clock starts the day the wire hits.
What the Numbers Do Not Catch
Two distortions to watch. Annual SaaS prepays inflate a single month of cash-in when they land. A $30K annual contract paid up front makes that month look great and the next 11 months look thin.
Seasonality matters too. Q1 collections often lag as buyers reset budgets. Q4 deals get pulled forward to hit the year. A single-month snapshot taken in either window can mislead.
Use a 3-month trailing average of net burn as your operating number. Use the single-month figure as your early-warning signal. When the single month diverges 20 percent or more from the trailing average, that is the moment to look closer.
Key Takeaways
Gross burn is total cash out. Net burn is cash out minus cash in. Runway is cash divided by net burn.
Pull gross burn from your QBO P&L. Pull cash collected from QBO bank feeds, cross-checked against Stripe payout reports.
Cost cuts, pricing changes, and bridge rounds each buy months. Model the new runway before you commit to the move.
Use a 3-month trailing average for operating decisions. Use single-month figures as your early-warning signal.
Conclusion
Runway is a forecast, not a fact. Founders who survive treat it as a weekly review item, not a quarterly board deck slide.
The Northwind Analytics CEO who models all three scenarios on a Saturday morning bought herself a 2026 she otherwise would have spent fundraising. The math is not hard. The discipline of doing it weekly is what separates the founders who choose their next move from the founders who get cornered into one.
Pick your version of Northwind. Pull the numbers. Run the scenarios. Then decide.
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