Definition of Burn rate:
Speed at which a new firm or project consumes capital and credit, before breaking-even and generating some income.
The burn rate is usually quoted in terms of cash spent per month. For example, if a company is said to have a burn rate of $1 million, it would mean that the company is spending $1 million per month.
The rate at which an enterprise spends money, especially venture capital, in excess of income.
The burn rate is typically used to describe the rate at which a new company is spending its venture capital to finance overhead before generating positive cash flow from operations. It is a measure of negative cash flow.
How to use Burn rate in a sentence?
- The corporation lays off workers to cut burn rate.
- The burn rate is typically calculated in terms of the amount of cash the company is spending per month.
- Gross burn is the total amount of operating costs it racks up each month, while net burn is the total amount of money a company loses monthly.
- The burn rate is the pace at which a new company is running through its startup capital ahead of it generating any positive cash flow.
Meaning of Burn rate & Burn rate Definition