Series A Burn Rate and Runway Management: Complete Guide

The Series A Burn Rate Challenge: Why This Stage Is Make-or-Break

Series A companies face a unique paradox: they must burn aggressively enough to capture market share and reach Series B metrics, while maintaining enough financial discipline to avoid running out of cash. According to Carta's 2024 analysis of 3,200+ Series A companies, the median burn rate is $250,000 monthly, with top-quartile companies burning $180,000 and bottom-quartile burning $380,000+.

The difference between success and failure at Series A isn't random. Companies that maintain 18-24 months of runway, keep burn multiples under 2.5x, and hit 150%+ annual growth rates have an 82% probability of successfully raising Series B within 24 months, according to Battery Ventures' 2024 data. Those that drop below 12 months runway or exceed 4.0x burn multiples face a 67% probability of down rounds, bridge rounds, or failure.

TL;DR: Series A companies should target $200K-$400K monthly gross burn depending on business model, maintain 18-24 months of runway at all times, and achieve burn multiples below 2.5x. The optimal strategy is not minimizing burn but maximizing capital efficiencyspending strategically to reach $3M-$5M ARR with strong unit economics within 18-24 months, which unlocks Series B at favorable terms.

Series A Burn Rate Benchmarks: Where Do You Stand?

Understanding where your burn rate sits relative to peers is critical for both internal planning and investor conversations. Burn expectations vary significantly by business model, market category, and go-to-market motion.

Gross Burn Rate Benchmarks by Business Model

According to OpenView Partners' 2024 SaaS Benchmarks analyzing 1,200+ B2B software companies and PitchBook's Series A database of 5,000+ companies:

B2B SaaS (SMB/Mid-Market Focus):

• Top Quartile: $180K-$250K monthly gross burn
• Median: $250K-$350K monthly
• Bottom Quartile: $350K-$500K+ monthly
• Typical team size: 25-40 employees
• Revenue at raise: $800K-$2M ARR

B2B SaaS (Enterprise Focus):

• Top Quartile: $300K-$400K monthly gross burn
• Median: $400K-$550K monthly
• Bottom Quartile: $550K-$800K+ monthly
• Typical team size: 30-50 employees
• Revenue at raise: $1M-$3M ARR

Marketplace/Platform Businesses:

• Top Quartile: $250K-$400K monthly gross burn
• Median: $400K-$600K monthly
• Bottom Quartile: $600K-$900K+ monthly
• Typical team size: 25-45 employees
• Revenue/GMV: Highly variable, often $2M-$10M GMV

Hardware/Deep Tech:

• Top Quartile: $400K-$600K monthly gross burn
• Median: $600K-$900K monthly
• Bottom Quartile: $900K-$1.5M+ monthly
• Typical team size: 20-40 employees
• Revenue: Often pre-revenue or minimal, focused on product milestones

Rachel Martinez, Partner at Foundation Capital, explains the variance: "Enterprise SaaS companies need larger sales teams with longer sales cycles, justifying higher burn. A company with $400K gross burn closing $100K ACV deals with 9-month sales cycles can be highly efficient. The same burn on a $10K ACV product with 2-month cycles suggests massive inefficiency. Context matters more than absolute numbers."

Net Burn Rate and Revenue Coverage

Net burn matters more than gross burn because it determines runway. At Series A, investors expect meaningful revenue that offsets a portion of gross burn.

Revenue Coverage Benchmarks (Revenue as % of Gross Burn):

• Top Quartile: 45-60% coverage (revenue covers nearly half of gross burn)
• Median: 30-45% coverage
• Bottom Quartile: 15-30% coverage
• Poor: Below 15% coverage (red flag at Series A stage)

A company with $400K gross burn and $180K monthly revenue (45% coverage) has $220K net burn. With $10M raised at Series A, that's 45 months of runwayexceptional. A company with the same gross burn but only $80K revenue (20% coverage) has $320K net burn and just 31 months runway.

According to SaaS Capital's 2024 survey of 2,200+ private SaaS companies, every 10 percentage points of additional revenue coverage correlates with 2.8 months of additional runway and 12% higher probability of successfully raising the next round.

The Burn Multiple: The Most Critical Metric

Burn multiple has emerged as the single best predictor of Series A success and Series B fundability. The formula:

Burn Multiple = Net Burn / Net New ARR

This measures capital efficiencyhow much you spend to acquire each dollar of new annual recurring revenue.

Series A Burn Multiple Benchmarks:

• Exceptional (Sub 1.0x): You spend less than $1 to acquire $1 of ARRthe top 5% of companies
• Excellent (1.0-1.5x): Top quartile efficiencyyou're spending $1.00-$1.50 per $1 of ARR
• Good (1.5-2.5x): Median rangespending $1.50-$2.50 per $1 of ARR
• Concerning (2.5-4.0x): Bottom quartilespending $2.50-$4.00 per $1 of ARR
• Poor (Above 4.0x): Unsustainable efficiencyspending $4+ per $1 of ARR

Data from Bessemer Venture Partners' 2024 State of the Cloud report shows companies maintaining burn multiples below 2.0x through Series A achieve Series B raises at valuations averaging 3.8x higher than companies with burn multiples above 3.5x.

Thomas Wu, Managing Director at Threshold Ventures, explains: "When I evaluate Series B opportunities, burn multiple is my first filter. Show me a company with 1.8x burn multiple growing 150% annually and I'm immediately interested. Show me 4.5x burn multiple growing 180% and I passthat growth is unsustainable and will collapse when they inevitably need to optimize. The math doesn't work at 4x+ for most business models."

Runway Management: The 18-24 Month Rule

Runway is the number of months until you run out of cash, calculated by dividing cash balance by net burn rate. At Series A, maintaining 18-24 months of runway at all times is critical for strategic flexibility and favorable Series B terms.

Why 18-24 Months Matters

According to Fundz's 2024 analysis of 800+ Series B fundraising timelines:

• Average time from first investor meeting to wire transfer: 5.2 months
• Recommended time to start fundraising: 9-12 months before running out of cash
• Buffer for unexpected delays, market conditions, or metric improvements: 3-6 months
• Total recommended runway: 18-24 months

Companies that drop below 12 months runway face severe negotiating disadvantage. Carta's 2024 analysis shows companies raising Series B with less than 9 months runway accept valuations averaging 34% below comparable companies with 15+ months runway. Desperation is expensive.

Jennifer Chen, CFO at a $25M ARR infrastructure company, shares her experience: "We raised our Series A with $12M at a $45M post-money valuation. Our plan was to burn $400K monthly, giving us 30 months of runway. Reality was messierwe burned $480K monthly on average due to faster hiring and higher CAC than projected. By month 18, we had 12 months runway remaining. We started Series B conversations and got harsh feedback about our burn multiple (2.9x). We spent 6 months optimizing burn and improving efficiency, which dropped our runway to 9 months. We eventually raised but at a $95M valuationjust 2.1x step-up instead of the 3-4x we'd expected. If we'd started fundraising earlier with better metrics, we'd have raised at 3.5x+."

Calculating and Tracking Runway

The Runway Formula:

Runway (months) = Current Cash Balance / Monthly Net Burn Rate

But smart founders track three versions of runway:

1. Optimistic Runway: Current cash / minimum net burn (assumes best-case revenue growth)

2. Realistic Runway: Current cash / 3-month average net burn (accounts for recent trends)

3. Conservative Runway: Current cash / maximum recent net burn (assumes continued high burn)

Michael Foster, CEO of a Series B fintech company, explains: "We track all three runway calculations in our monthly board deck. When optimistic runway is 22 months but conservative is 16 months, that 6-month spread tells me our burn is volatile and unpredictable. That's a management problem to fix. Top-performing companies have less than 3 months spread between optimistic and conservative runway because they control their burn tightly."

Runway Pressure Points and Actions

Different runway levels trigger different strategic actions:

24+ Months Runway:

• Status: Comfortable position, strategic flexibility
• Actions: Focus entirely on growth and product-market fit
• Fundraising: Don't think about next round yet
• Risk: Complacencysome companies burn inefficiently when runway feels infinite

18-24 Months Runway:

• Status: Optimal operating range
• Actions: Balance growth investments with burn discipline
• Fundraising: Begin preparingupdate metrics deck, identify target investors
• Risk: Nonethis is the target state

12-18 Months Runway:

• Status: Time to start fundraising or optimize burn
• Actions: If metrics are strong, start Series B conversations. If metrics are weak, optimize burn to extend runway
• Fundraising: Active outreach to investors, running parallel processes
• Risk: Moderateyou have time but shouldn't delay

9-12 Months Runway:

• Status: Urgentlimited time to close round
• Actions: Full-time fundraising mode or aggressive burn reduction (or both)
• Fundraising: Accept first reasonable term sheet rather than optimizing
• Risk: Highnegotiating leverage is weak, may face bridge round

Below 9 Months Runway:

• Status: Criticalsurvival mode
• Actions: Take any reasonable funding available, cut burn 30-40% immediately
• Fundraising: Accept down round or bridge round terms
• Risk: Severemay face shutdown if funding doesn't close

According to First Round Capital's 2024 analysis of 400+ Series A companies, 91% of companies that maintained 18+ months runway throughout their Series A period successfully raised Series B at favorable terms, compared to just 38% of companies that dropped below 12 months runway.

Burn Rate Evolution: The Typical Series A Journey

Understanding how burn should evolve throughout your Series A period helps with planning and board communication. Here's the typical 24-month post-Series A trajectory for a successful B2B SaaS company.

Months 0-6: Cautious Scaling

Starting Position: Just closed $10M Series A, 15 employees, $1.2M ARR ($100K MRR), $120K monthly net burn pre-raise

Target Burn: $180K-$220K net burn monthly

Key Activities:

• Hire 8-12 key roles identified in fundraising plan (3-4 AEs, 2-3 engineers, 1-2 CSMs, 1 marketing lead)
• Validate unit economics before aggressive scaling
• Optimize CAC payback to sub-12 months
• Prove repeatability of sales process with new reps

Target Metrics by Month 6:

• Team size: 23-27 employees
• ARR: $1.8M-$2.2M
• Gross burn: $280K-$320K monthly
• Net burn: $180K-$220K monthly (revenue covering 35-40% of gross burn)
• Burn multiple: 2.2-2.8x
• Runway: 21-24 months

Sarah Kim, CEO of a vertical SaaS company, describes this period: "The first 6 months post-Series A are about validating your plan, not executing it at full speed. We hired deliberately, testing each new rep and channel before scaling. We added 3 AEs over 4 months and watched their ramp carefully. Two hit quota by month 3, one struggled and we replaced them by month 5. That taught us exactly what good looks like before we scaled to 8 reps by month 12."

Months 7-18: Aggressive Scaling

Position at Month 7: $2M ARR, 25 employees, validated unit economics, proven sales process

Target Burn: $250K-$350K net burn monthly (intentionally increasing)

Key Activities:

• Scale sales team aggressively (add 1-2 reps per quarter)
• Invest in marketing to fill pipeline for growing sales team
• Build out customer success to protect and expand existing revenue
• Continue engineering investment in product differentiation
• Expand to adjacent markets or segments

Target Metrics by Month 18:

• Team size: 38-48 employees
• ARR: $4M-$5.5M
• Gross burn: $500K-$600K monthly
• Net burn: $250K-$350K monthly (revenue covering 45-55% of gross burn)
• Burn multiple: 1.8-2.4x
• Runway: 16-20 months

This is the phase where burn increases substantially but revenue growth accelerates even faster. Net burn increases from $200K to $300K (50% increase), but revenue grows from $167K MRR to $417K MRR (150% increase). The gross-net spread widens dramatically, showing improving capital efficiency despite higher absolute burn.

Marcus Lee, CFO at a Series B analytics platform, reflects: "Months 7-18 were our highest burn period but also our highest growth. We went from $2.1M to $5.2M ARR148% growth. Our board was nervous about $600K gross burn, but we showed them our burn multiple improved from 2.6x to 1.9x during this period. We were spending more but generating revenue much faster. That's exactly what Series B investors want to see."

Months 19-24: Optimization and Series B Prep

Position at Month 19: $5M ARR, 45 employees, strong growth, preparing for Series B

Target Burn: $200K-$300K net burn monthly (stable or declining)

Key Activities:

• Optimize burn to show improving efficiency
• Demonstrate path to profitability even if not executing it
• Build 18+ months of detailed financial projections
• Prepare comprehensive Series B fundraising materials
• Begin investor conversations 9-12 months before running out of cash

Target Metrics by Month 24:

• Team size: 45-55 employees
• ARR: $6M-$8M
• Gross burn: $550K-$650K monthly
• Net burn: $200K-$300K monthly (revenue covering 55-65% of gross burn)
• Burn multiple: 1.3-1.9x
• Runway: 15-20 months (with Series B closing before depletion)

Amanda Foster, CEO of a company that raised a $35M Series B, explains: "We spent months 19-24 optimizing everything. We didn't cut burn dramatically, but we improved efficiency across the board. Our sales cycle dropped from 90 to 68 days through better qualification. Our CAC payback improved from 11 to 8 months through higher close rates. Our net retention increased from 105% to 118% through better customer success. These efficiency improvements showed Series B investors we were ready for $35M in growth capital, not just burning their money."

Series B Readiness: What Metrics Unlock the Next Round?

Understanding Series B expectations helps you reverse-engineer your Series A burn and growth strategy. Series B investors look for specific metrics that signal you're ready for growth capital.

The Series B Metric Thresholds

According to analysis from Battery Ventures, NFX, and Bessemer of 600+ successful Series B raises in 2023-2024:

Revenue Metrics:

• Minimum ARR: $3M (absolute floor), $5M-$8M (competitive range), $10M+ (strong position)
• Growth Rate: 100%+ YoY (minimum), 150%+ (competitive), 200%+ (exceptional)
• Net Revenue Retention: 100% (minimum), 110-120% (competitive), 130%+ (exceptional)

Efficiency Metrics:

• Burn Multiple: Below 3.0x (minimum), 1.5-2.5x (competitive), below 1.5x (exceptional)
• CAC Payback: Under 18 months (minimum), under 12 months (competitive), under 9 months (exceptional)
• LTV:CAC Ratio: Above 3:1 (minimum), 4:1-6:1 (competitive), 6:1+ (exceptional)
• Gross Margin: 70%+ (minimum for SaaS), 75-80% (competitive), 85%+ (exceptional)

Scale Metrics:

• Customers: 50+ logos (minimum), 100-200 (competitive), 300+ (strong)
• Team Size: 30+ employees (minimum), 40-60 (typical), 70+ (large teams need justification)
• Runway: 12+ months when starting conversations (minimum), 15-18 months (comfortable)

Jennifer Park, Partner at Amplify Ventures, explains her Series B evaluation framework: "I need to see $5M+ ARR growing 120%+ with burn multiple under 2.5x. That's my minimum bar. If all three check those boxes, I'll take the meeting. Then I evaluate NRR, gross margins, and market size. A company with $5M ARR growing 180% with 1.8x burn multiple and 115% NRR gets a term sheet quickly. A company with $8M ARR growing 80% with 3.2x burn multiple doesn'tthey grew too slowly or too inefficiently."

The Burn Multiple Trajectory to Series B

Your burn multiple trajectory throughout Series A significantly impacts Series B fundability and valuation. According to SaaS Capital data:

Strong Trajectory (Commands Premium Valuations):

• Month 0-6: 2.5-3.0x (higher burn as you validate scaling)
• Month 7-12: 2.0-2.5x (improving as revenue scales)
• Month 13-18: 1.5-2.0x (continued improvement)
• Month 19-24: 1.2-1.8x (approaching Series B with strong efficiency)

Acceptable Trajectory (Raises Successfully):

• Month 0-6: 3.0-3.5x
• Month 7-12: 2.5-3.0x
• Month 13-18: 2.0-2.8x
• Month 19-24: 1.8-2.5x

Concerning Trajectory (Struggles to Raise):

• Month 0-6: 3.5-4.5x
• Month 7-12: 3.0-4.0x
• Month 13-18: 2.8-3.8x
• Month 19-24: 2.5-3.5x (flat or worsening efficiency)

Companies showing improving burn multiple trajectories (declining from 3.0x to 1.5x over 24 months) raise Series B at valuations averaging 62% higher than companies with flat trajectories (staying at 2.5-3.0x throughout), according to PitchBook's 2024 analysis.

Managing Burn Rate: The CFO Playbook for Series A

Professional financial management at Series A requires systems, metrics, and discipline. Here's how top CFOs manage burn to maximize growth while maintaining runway.

Monthly Financial Review Process

Rachel Foster, CFO at a $40M ARR infrastructure company, shares her monthly financial review process used since Series A:

Week 1 of Each Month: Data Collection and Analysis

• Close books within 5 business days of month end
• Calculate gross burn, net burn, and runway (actual vs. budget)
• Update 3-month rolling averages for all metrics
• Calculate burn multiple for the month and trailing 3 months
• Analyze variance from budget by category (payroll, marketing, infrastructure, etc.)
• Flag any category with 15%+ variance from budget for deep dive

Week 2: Department Reviews

• Meet with each department head to review spending and productivity
• Calculate revenue per employee by department
• Review hiring pipeline and project future burn based on planned hires
• Evaluate ROI on major spending categories (did that $30K marketing campaign generate expected pipeline?)
• Adjust spending forecasts based on actual results

Week 3: Executive Team Review

• Present full financial picture to CEO and executive team
• Review updated runway scenarios (optimistic, realistic, conservative)
• Discuss any needed course corrections
• Update annual budget projections based on trends
• Make go/no-go decisions on major spending (new hires, new tools, marketing campaigns)

Week 4: Board Preparation

• Prepare comprehensive financial section of board deck
• Include actuals vs. budget, burn trend analysis, runway projections
• Highlight key metrics: burn multiple, CAC payback, LTV:CAC, NRR
• Provide forward-looking guidance for next quarter
• Flag any concerns proactively rather than waiting for board questions

The Budget Planning Framework

At Series A, you need bottoms-up budgets by department with clear assumptions and monthly projections. Here's the framework top CFOs use:

1. Revenue Budget (Build First):

• Project monthly new bookings by rep and ramp schedule
• Account for seasonality and sales cycle length
• Model churn by cohort based on historical data
• Project expansion revenue based on NRR trends
• Build three scenarios: conservative (75% of plan), realistic (100%), optimistic (125%)

2. Sales and Marketing Budget:

• Calculate sales headcount needed to hit revenue targets
• Model rep ramp (typically 3-6 months to full productivity)
• Allocate marketing spend to maintain 3x pipeline coverage
• Ensure CAC payback stays under 12-15 months
• This typically represents 40-60% of gross burn

3. Engineering and Product Budget:

• Define product roadmap and engineer headcount to deliver it
• Include infrastructure costs scaling with usage
• Plan for approximately 1 engineer per $500K-$800K ARR
• This typically represents 25-35% of gross burn

4. Customer Success Budget:

• Calculate CSM headcount based on ARR per CSM targets ($1M-$2M depending on segment)
• Ensure coverage ratios support target NRR
• This typically represents 10-15% of gross burn

5. Operations and Overhead Budget:

• Finance, HR, legal, facilities, IT
• Keep this at 8-12% of gross burn maximum
• Resist urge to build large operations teams early

6. Buffer for Flexibility:

• Maintain 5-10% unallocated budget for opportunities or overruns
• Better to plan conservatively and underspend than overspend budget

Scenario Planning: The Three-Case Model

Professional CFOs maintain three budget scenarios continuously updated based on actual performance:

Best Case Scenario (25% probability):

• Revenue comes in 20-30% above plan
• Can accelerate hiring and investment
• Burn increases but burn multiple improves due to revenue overperformance
• Reach Series B metrics 3-6 months faster than planned

Base Case Scenario (50% probability):

• Revenue comes in within 10% of plan
• Execute hiring plan as designed
• Maintain planned burn rate
• Reach Series B metrics on timeline

Downside Case Scenario (25% probability):

• Revenue comes in 20-30% below plan
• Implement hiring freeze and burn optimization
• Reduce gross burn 20-30% to extend runway
• Take 6-12 months longer to reach Series B metrics

Michael Tran, CFO at a Series C security company, explains: "We update these scenarios monthly based on actual results. If we're tracking toward downside case for 2-3 consecutive months, we implement the downside plan immediately rather than hoping things improve. That decisiveness saved us in 2023 when our sales cycle extended by 40 days unexpectedly. We implemented downside plan by month 3 of the trend, extended our runway by 9 months, and successfully raised Series B 8 months later from a position of strength rather than desperation."

When to Optimize Burn vs. When to Accelerate

The Series A stage requires balancing growth and efficiency dynamically. Sometimes you should burn more aggressively; sometimes you should optimize burn. Here's the decision framework.

Signals to Increase Burn Rate

According to analysis from Redpoint Ventures and Bessemer, these signals indicate you should invest more aggressively (even if it increases burn):

• Strong Unit Economics: CAC payback under 12 months and LTV:CAC above 4:1 means you have capital-efficient growthpour fuel on the fire
• Winner-Take-All Market: In markets with strong network effects where #1 captures 60%+ share, controlled aggressive burning beats conservative approaches
• Product-Market Fit Achieved: NRR above 115%, low churn, strong word-of-mouthtime to scale go-to-market
• Competitive Threat: Well-funded competitor raising aggressivelymay need to match their market spend to defend position
• Market Timing: Windows of opportunity in emerging categoriesbeing 12 months early to market can create insurmountable advantages
• Healthy Runway: 24+ months of runway with strong revenue growthyou have cushion to invest

Sarah Williams, CEO of a company that grew from $2M to $45M ARR in 30 months, reflects: "At month 9 post-Series A, we had exceptional unit economics6-month CAC payback and 5.8:1 LTV:CAC. We had 22 months of runway and our burn multiple was 1.6x. We made the decision to accelerate burn from $280K to $420K monthly by doubling our sales team from 5 to 10 reps. Our burn multiple temporarily worsened to 2.1x for 4 months as reps ramped, then improved to 1.3x as they hit full productivity. That aggressive hiring let us capture market share before two competitors raised Series Bs. Best decision we made."

Signals to Optimize Burn Rate

These signals indicate you should reduce or optimize burn immediately:

• Poor Unit Economics: CAC payback above 18 months or LTV:CAC below 3:1you're burning money inefficiently
• Runway Below 15 Months: Limited time to reach next milestoneneed to extend runway
• Weak Product-Market Fit: High churn, low NRR, weak word-of-mouthdon't scale broken go-to-market
• Deteriorating Burn Multiple: If burn multiple is increasing month-over-month, you're becoming less efficientfix this
• Fundraising Environment: In tight funding markets (2023-2024), longer runways and better burn multiples matter more than aggressive growth
• Missing Projections: Revenue tracking 20%+ below plan for 2-3 consecutive monthsyou need more time to fix issues

Marcus Chen, CEO of a Series B fintech platform, shares: "We raised Series A in late 2021 during peak frothiness. Our plan was aggressivescale from $1.5M to $10M ARR in 18 months burning $550K monthly. By mid-2022, the market had changed completely, and our sales cycles extended from 60 to 105 days. We were tracking to $5M ARR instead of $7M by month 12. We implemented burn optimization in month 13, cutting gross burn from $620K to $380K over 90 days. This extended our runway from 11 months to 21 months. We spent the next 12 months improving efficiency and raised Series B in late 2023 from a position of strength with 14 months of runway and a 1.7x burn multiple."

Series A Burn Rate FAQs

What's a good burn rate for a Series A company?

For B2B SaaS companies, target $200K-$400K monthly gross burn depending on your business model and go-to-market motion. Enterprise-focused companies with longer sales cycles typically burn $350K-$500K monthly, while SMB-focused companies should target $200K-$300K. More important than absolute burn is your burn multipletarget 1.5-2.5x (meaning you spend $1.50-$2.50 in net burn for every $1 of new ARR). According to OpenView's 2024 benchmarks, companies maintaining gross burn in the lower 40% of their category while achieving top-quartile growth rates have 2.8x higher Series B success rates.

How much runway should I maintain at Series A?

Maintain 18-24 months of runway at all times throughout your Series A period. According to Carta's analysis of 3,200+ Series A companies, those maintaining 18+ months of runway had 82% probability of successfully raising Series B at favorable terms, versus 38% for companies dropping below 12 months. Start your Series B fundraising conversations when you have 12-15 months of runway remaining, as the average Series B process takes 5-6 months from first meeting to wire transfer. Never let runway drop below 9 months without either active term sheets or aggressive burn reduction.

What burn multiple should I target at Series A?

Target a burn multiple (net burn divided by net new ARR) of 1.5-2.5x throughout your Series A period, with a trajectory showing improvement over time. According to Bessemer's State of the Cloud report, companies maintaining burn multiples below 2.5x achieve Series B raises at valuations 3.8x higher than companies with burn multiples above 3.5x. Top performers show improving burn multiplesstarting at 2.5-3.0x in the first 6 months post-Series A, improving to 2.0-2.5x by month 12, and reaching 1.5-2.0x by month 24. If your burn multiple exceeds 4.0x, you have serious efficiency problems that will make Series B extremely difficult.

When should I start thinking about Series B?

Begin Series B planning 18 months post-Series A and start active fundraising conversations 12-15 months before running out of cash (typically 20-24 months post-Series A). According to Fundz data, successful Series B processes take 5-6 months from first investor meeting to wire transfer. You need time to improve metrics if initial feedback is lukewarm, which means starting earlier than feels comfortable. Companies that wait until 9-10 months of runway to start fundraising face severe negotiating disadvantage and accept valuations averaging 34% below companies starting earlier.

What ARR do I need to raise Series B?

Minimum threshold is $3M ARR, competitive range is $5M-$8M ARR, and strong position is $10M+ ARR according to Battery Ventures' analysis of 600+ successful Series B raises. However, ARR alone doesn't determine fundabilitygrowth rate and efficiency matter equally. A company with $5M ARR growing 180% annually with 1.8x burn multiple raises easily. A company with $8M ARR growing 60% with 3.5x burn multiple struggles. Focus on the combination of scale ($5M+ ARR), growth (120%+ annually), and efficiency (burn multiple under 2.5x) rather than any single metric.

Should I cut burn or try to raise if runway is getting short?

If you have 12+ months of runway and Series B-ready metrics ($5M+ ARR, 120%+ growth, sub-2.5x burn multiple), start fundraising immediately. If you have less than 12 months and weak metrics, cut burn immediately to extend runwayyou'll raise at much better terms in 6-9 months with improved metrics and 18+ months of runway than today with desperation. If you're borderline (12-15 months runway, decent but not great metrics), do both: start fundraising while simultaneously optimizing burn to improve metrics and extend runway. According to First Round Capital data, companies that improved burn multiples during their Series B fundraising process achieved 41% higher valuations than companies maintaining flat or worsening burn multiples.

How should my burn rate change throughout Series A?

Expect gross burn to increase 2.5-3.5x over 24 months as you scale the team from 15-20 employees to 45-60 employees. However, net burn should increase more slowly (1.5-2.0x) because revenue grows faster than gross burn. A typical trajectory: Month 0 at $280K gross/$180K net burn increasing to Month 24 at $650K gross/$250K net burn. The widening gross-net spread (from $100K to $400K) demonstrates improving capital efficiency. According to SaaS Capital benchmarks, top-performing Series A companies show gross burn increasing 150-200% while net burn increases only 50-100% over 24 months, with burn multiple improving 30-50%.

Use icanpitch.com to model your Series A burn rate scenarios and understand how different spending and growth trajectories impact your Series B readiness and fundraising timeline.