01
Burn Rate
net burn = cash outflows − cash inflows
02
Runway
runway ≈ cash balance / average monthly net burn
Runway is only an approximation because burn changes with hiring, growth, inventory, receivables, capital expenditure, and financing.
03
Capital Allocation
- Product development.
- Hiring.
- Customer acquisition.
- Infrastructure.
- Inventory.
- Research.
- Regulatory work.
- Contingency.