Startup Finance Glossary

The number of months your cash lasts at your current net burn. BurnRateIQ divides cash at the end of the month by the average net burn of the last three months, so one unusual month doesn't swing the answer. A company that isn't burning cash has no runway figure.

Runway = cash ÷ average monthly net burn (last 3 months)

• Read: How to Calculate Startup Runway (and Why the Simple Formula Misleads)
• Read: How Much Runway Should a Startup Have? The 2026 Seed Answer

The total cash your company spends in a month on payroll, rent, vendors and other operating costs, before counting any revenue.

Gross burn = total operating spend for the month

• Read: Gross Burn vs Net Burn: What Each Number Tells You

What you spend in a month minus the revenue you bring in that month. BurnRateIQ floors it at zero: a month that earns more than it spends has no net burn. Net burn sets your runway.

Net burn = max(0, expenses − revenue)

• Read: Gross Burn vs Net Burn: What Each Number Tells You
• Read: How to Calculate Startup Runway (and Why the Simple Formula Misleads)

The first month your plan shows cash below zero. It moves whenever revenue, hiring or spending in the plan changes, which is why BurnRateIQ recomputes it as the books close each month.

• Read: How Much Should a Startup Raise? A Simple Rule for Sizing Your Round

How much cash you burn for each dollar of new annual recurring revenue. BurnRateIQ computes it each month as net burn divided by that month's net new ARR (the change in MRR times 12). It shows no value when the company isn't burning or ARR didn't grow, since the ratio means nothing then. Lower is better.

Burn multiple = net burn ÷ net new ARR

• Read: What Is a Good Burn Multiple? Benchmarks for SaaS Founders

Subscription revenue for the month. One-time fees and services stay out of it, so it tracks the revenue you can expect to repeat.

• Read: SaaS Benchmarks by ARR: Growth, Retention and Gross Margin

MRR times 12: the yearly value of your subscriptions at this month's pace. The benchmarks on this site group companies by ARR band.

ARR = MRR × 12

• Read: SaaS Benchmarks by ARR: Growth, Retention and Gross Margin
• Benchmarks: published ranges for Annual Recurring Revenue

How much MRR grew from last month to this month, as a percentage.

MoM growth = MRR this month ÷ MRR last month − 1

The MRR you earn today from the customers you had 12 months ago, divided by what those same customers paid then. Expansion raises it; downgrades and cancellations lower it. Above 100% means existing customers grow on their own.

NRR = MRR now from last year's customers ÷ their MRR 12 months ago

• Read: SaaS Benchmarks by ARR: Growth, Retention and Gross Margin
• Benchmarks: published ranges for Net Revenue Retention

Like NRR, but expansion doesn't count: only cancellations and downgrades. GRR can't exceed 100%. One minus GRR is gross revenue churn.

GRR = retained MRR from last year's customers, without expansion ÷ their MRR 12 months ago

• Read: SaaS Benchmarks by ARR: Growth, Retention and Gross Margin
• Benchmarks: published ranges for Gross Revenue Retention

The share of customers lost in a month: customers who cancelled divided by customers at the start of the month.

Logo churn = customers lost ÷ customers at the start of the month

The share of revenue left after the cost of delivering it, such as hosting, third-party software inside the product and customer support.

Gross margin = (revenue − cost of revenue) ÷ revenue

• Read: SaaS Benchmarks by ARR: Growth, Retention and Gross Margin
• Benchmarks: published ranges for Gross Margin

MRR divided by the number of paying customers.

ARPA = MRR ÷ customers

Sales and marketing spend in a month divided by the new customers won that month.

CAC = sales and marketing spend ÷ new customers

• Benchmarks: published ranges for Customer Acquisition Cost

The months of gross profit a new customer takes to repay what it cost to win them. BurnRateIQ shows no value when a customer earns nothing after cost of revenue, since that customer never pays back.

CAC payback = CAC ÷ (ARPA × gross margin)

• Benchmarks: published ranges for CAC Payback Period

What a customer is worth over their lifetime compared with what it cost to win them. BurnRateIQ estimates lifetime value from ARPA, gross margin and the average monthly logo churn of the last 12 months.

LTV = ARPA × gross margin ÷ monthly logo churn; ratio = LTV ÷ CAC

Year-over-year revenue growth plus EBITDA margin. The rule says a healthy software company keeps the sum at 40% or more, trading growth for profit or the reverse.

Rule of 40 = revenue growth (year over year) + EBITDA margin

Earnings before interest, taxes, depreciation and amortization: operating profit before financing and accounting charges. The Rule of 40 uses it as a share of revenue.

Sales and marketing spend for each dollar of new ARR from new customers. A ratio of 2.0 means $2 of spend bought $1 of new ARR.

New CAC ratio = sales and marketing spend ÷ new ARR from new customers

• Benchmarks: published ranges for New CAC Ratio