Complete guide to pre-seed burn rate benchmarks in 2025. Industry-specific ranges, team composition costs, and runway expectations for early-stage startups.
Pre-seed burn rate represents the monthly cash a startup consumes before achieving product-market fit or significant traction. In 2025, pre-seed burn rates have stabilized after the 2022-2023 correction, with founders returning to capital-efficient growth models. Understanding these benchmarks is critical for setting realistic expectations, managing runway, and demonstrating fiscal responsibility to investors.
According to Carta's 2024 State of Startups report, the median pre-seed company now burns between $30,000 and $80,000 per month, with significant variation by geography, industry, and founding team composition. This represents a 25-30% decrease from 2021 peak levels, reflecting the current emphasis on sustainable growth over growth-at-all-costs.
Industry choice fundamentally impacts burn rate expectations. Here are the 2025 benchmarks across key sectors:
Typical Monthly Burn: $40,000-$70,000
SaaS startups at pre-seed typically spend on technical co-founder salaries, cloud infrastructure, and early design resources. The lean range ($40K-$50K/month) applies to technical founding teams building with no-code/low-code tools or leveraging open-source frameworks. The higher range ($60K-$70K/month) reflects teams hiring a first engineer or investing in AI infrastructure.
Key cost drivers include AWS/GCP hosting ($500-$2,000/month), developer tools and SaaS subscriptions ($1,000-$3,000/month), and founder salaries if not working for equity only ($0-$40,000/month combined).
Typical Monthly Burn: $50,000-$90,000
Consumer startups burn higher than B2B SaaS at pre-seed due to user acquisition costs, content creation, and community building expenses. Even in testing phases, consumer founders often allocate $5,000-$15,000/month to Facebook, Instagram, or TikTok ads to validate channels and unit economics.
Marketplace models face additional complexity with two-sided acquisition costs. Successful pre-seed marketplace founders typically focus spending on supply-side acquisition first, often through manual outreach rather than paid ads, keeping burn closer to $50K-$60K/month.
Typical Monthly Burn: $60,000-$120,000
Hardware startups consistently show the highest pre-seed burn rates due to prototyping costs, manufacturing tooling, regulatory compliance, and longer development cycles. According to NFX research, hardware founders should plan for 18-24 month runways versus the standard 12-18 months for software.
Deep tech startups in AI/ML, biotech, or advanced materials often secure larger pre-seed rounds ($1M-$2M) specifically to accommodate higher burn rates while building proof-of-concept prototypes or completing early research milestones.
Typical Monthly Burn: $55,000-$85,000
Fintech burn rates sit between SaaS and hardware, driven by compliance costs, banking partnerships, and security infrastructure requirements. Early-stage fintech founders typically allocate $5,000-$15,000/month to legal and compliance work, even before launching to customers.
Many successful fintech pre-seeds leverage Banking-as-a-Service platforms (Stripe Treasury, Unit.co, Synapse) to reduce infrastructure costs, keeping burn on the lower end of the range.
Your team composition directly determines your burn rate. Here are the standard models in 2025:
Two to three co-founders working for minimal or no salary, covering only essential business expenses. This model works when founders have sufficient personal runway (savings, spousal income, or part-time consulting).
Founders taking lean salaries plus one key hire (typically a senior engineer or product designer). This model is common when founders need to fill a critical skill gap.
Teams that raised larger pre-seed rounds ($1.5M-$2M+) often hire 2-4 early employees and pay market-rate founder salaries. This model is most common in competitive markets (AI, fintech) where talent acquisition requires competitive compensation.
While higher burn rates accelerate product development, they also reduce flexibility. Many 2024-2025 pre-seed investors actively discourage this model unless there's a compelling reason for speed-to-market.
Location dramatically impacts burn rate through salary expectations and operational costs:
Median Burn: $70,000-$100,000/month
Highest burn rates globally due to talent costs and cost of living. A senior engineer in SF commands $180K-$250K base salary, versus $120K-$160K in secondary markets. However, SF access to investors and talent density can justify the premium for certain startups.
Median Burn: $60,000-$90,000/month
Similar to SF but slightly lower, especially for non-technical roles. NYC excels for fintech, media, and consumer startups where domain proximity matters.
Median Burn: $50,000-$75,000/month
30-40% lower costs than SF/NYC while maintaining access to quality talent. These markets have matured significantly, with experienced startup operators and advisors available locally.
Median Burn: $40,000-$65,000/month
Remote-first teams can hire globally, accessing talent in lower-cost markets while offering competitive local salaries. Many 2025 pre-seeds default to remote-first, using geography as a competitive advantage rather than a constraint.
Median Burn: $25,000-$60,000/month
Significantly lower burn rates in Europe (particularly Eastern Europe), Latin America, and Southeast Asia. A $500K pre-seed round in these markets can provide 18-24 months of runway versus 8-12 months in Silicon Valley.
The standard pre-seed runway target in 2025 is 12-18 months, with most sophisticated investors expecting founders to plan for 15+ months minimum. Here's why:
Twelve months is considered the absolute floor because it takes 6-9 months to raise a seed round. If you start fundraising at month 9 with 3 months of runway remaining, you're already in a weak negotiating position. Investors can sense desperation, and you may accept unfavorable terms.
Eighteen months provides buffer for unexpected challenges: slower customer acquisition, technical setbacks, or market changes. It also allows you to optimize seed round timing rather than raising out of necessity.
According to Y Combinator, founders who raise seed rounds with 6+ months of runway remaining achieve 15-20% higher valuations on average than founders raising with less than 3 months remaining.
Certain business models justify 24+ month runways:
Use this formula to reverse-engineer your appropriate burn rate:
Target Monthly Burn = (Total Pre-Seed Capital Raised × 0.90) ÷ Target Runway Months
The 0.90 multiplier accounts for one-time expenses (legal fees, incorporation, initial setup) that consume approximately 10% of the round.
Investors will scrutinize your burn rate during seed fundraising. Here are warning signs your burn is unsustainable:
Unless you're in deep tech or hardware, burning six figures monthly at pre-seed suggests poor capital allocation. This often indicates overhiring, excessive founder salaries, or premature scaling.
If you have fewer than 10 months of cash, you should already be in active fundraising mode. Many founders underestimate how long raises take, especially first-time founders without warm investor networks.
Your burn rate should correlate with traction. If you're burning 30% more each month but user growth or revenue is flat, you're scaling costs without scaling output—a major red flag.
Here are tactical strategies to extend runway without sacrificing velocity:
Many successful founders take $0-$5,000/month salaries at pre-seed, reserving capital for hires or customer acquisition. If you must pay yourselves, benchmark against local living costs rather than market salary rates.
Instead of full-time hires, use fractional CTOs, contract designers, or offshore developers for specific projects. Platforms like Toptal and Upwork provide access to senior talent at 30-50% below full-time costs.
Most infrastructure and SaaS providers offer startup programs: AWS Activate (up to $100K credits), Google Cloud for Startups ($200K credits), Stripe Atlas benefits. These programs can reduce burn by $2,000-$5,000/month.
Defer spending on office space, conferences, premium tools, and brand design until post-product-market-fit. Every dollar saved extends runway and increases your chances of reaching key milestones.
Understanding benchmarks is just the first step. Use ICanPitch's runway calculator to model different scenarios, compare your burn rate against industry peers, and plan your path to seed funding with confidence. Get data-driven insights tailored to your stage, industry, and geography.
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