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Y Combinator6 min

Tim Brady - How do you calculate burn rate, runway and growth rate?

Tim Brady

Tutorial

The presentation clarifies critical financial metrics for startups, defining burn rate as a strict weekly cash flow measure and runway as the resulting duration of available capital. It further details how founders must calculate Compound Monthly Growth Rates to avoid misleading investors and distinguish between predictable recurring revenue and less stable non-recurring income. Accurately applying these concepts allows entrepreneurs to demonstrate sophisticated financial management and improve their prospects for securing venture capital.