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Gross burn rate

What is a gross burn rate?

The gross burn rate is the rate at which a company is spending its cash reserves before taking into account any cash inflows. This measure is often used by startups to understand how long they can continue operating with their current cash reserves.

The gross burn rate helps founders and investors assess the company's financial health and runway. If the gross burn rate is too high, it indicates that the company could run out of cash quickly, which could necessitate additional fundraising or cost-cutting measures.

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