What is a Burn Rate? Definition or Meaning

Burn rate’ describes the speed at which you ‘burn through’ your company’s initial funding.

For example…

In the TV show Silicon Valley, tech startup Pied Piper receives initial funding of several hundred thousand dollars from an investor. The CEO excitedly goes out to purchase a margarita machine to celebrate before realising he has to slow down on the spending and lower his burn rate in order to pay for all the staff and setup costs of his new business.