Model burn rates, runway scenarios, break-even analysis, and cash flow projections for multi-product venture studios
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Before starting, gather project context silently:
PORTFOLIO.md if it exists in the project root or parent directories for product/team contextcat package.json 2>/dev/null || cat build.gradle.kts 2>/dev/null || cat Podfile 2>/dev/null to detect stackgit log --oneline -5 2>/dev/null for recent changesls src/ app/ lib/ functions/ 2>/dev/null to understand project structureModel burn rates, runway scenarios, and cash flow projections for multi-product venture studios. Built for Cure Consulting Group's portfolio: Vendly (LATAM merchant OS), Autograph (AI medical scribe), The Initiated (women's basketball recruiting), Antigravity (AI agent orchestration), TwntyHoops (basketball media/events). Every dollar should be traceable to a product, and every product should have a path to sustainability.
| Type | When to Use | Output |
|---|---|---|
| Single product burn | Analyzing one portfolio company | Monthly burn, runway, break-even for that product |
| Portfolio burn | Studio-wide financial view | Aggregated burn across all products with allocation |
| Runway scenario | Planning fundraise timing or cost cuts | Conservative/base/optimistic/zero-revenue projections |
| Break-even analysis | Product reaching sustainability | Revenue needed per product and for portfolio |
| Budget planning | Quarterly or annual planning cycle | Forward-looking budget with targets per product |
| Cost reduction modeling | Runway getting tight | Tiered cost-cutting plan with runway impact |
FIXED COSTS (predictable, don't change with usage)
Category Examples Frequency
──────────────────────────────────────────────────────────────────────────────
Salaries Full-time team, founders' comp Monthly
Benefits Health insurance, 401k, equity admin Monthly
Rent / Coworking Office space, hot desks Monthly
Insurance D&O, E&O, general liability, cyber Monthly/Annual
Legal retainer Corporate counsel, IP, compliance Monthly
Accounting Bookkeeping, tax prep, audit Monthly/Quarterly
Software (core) GitHub, Slack, Notion, Figma, GSuite Monthly
Payroll processing Gusto, Rippling, etc. Monthly
VARIABLE COSTS (scale with usage, customers, or decisions)
Category Examples Driver
──────────────────────────────────────────────────────────────────────────────
Cloud infrastructure Firebase, GCP, AWS, Vercel Users/requests
AI API costs OpenAI, Anthropic, Google AI Tokens/requests
Payment processing Stripe fees (2.9% + $0.30) Transaction volume
Marketing Ads, content, events, sponsorships Campaign decisions
Contractors Design, specialized engineering, legal Project-based
Travel Conferences, client meetings, recruiting As needed
Data services Analytics tools, data providers Scale-dependent
PRODUCT ALLOCATION
Every cost falls into one of three buckets:
1. Product-specific — directly attributable (e.g., Autograph's HIPAA compliance tools)
2. Shared — benefits multiple products (e.g., shared infrastructure, design team)
3. Studio overhead — benefits the entity, not a product (e.g., accounting, legal)
Allocation rules (pick ONE method and be consistent):
- Headcount ratio: shared costs split by number of people on each product
- Revenue ratio: shared costs split by revenue contribution (use for mature products)
- Equal split: only when products are at similar stages (rarely appropriate)
Recommended: headcount ratio for early-stage portfolio (most costs are people)
GROSS BURN
= Total monthly expenses (before any revenue)
= Fixed costs + variable costs
This is what you spend regardless of revenue.
NET BURN
= Total monthly expenses - total monthly revenue
= Gross burn - revenue
This is how much cash you actually lose each month.
RUNWAY
= Cash balance / net burn rate
= Number of months until cash hits zero
Rule: this is a point-in-time calculation — recalculate monthly
PER-PRODUCT BURN
= Product-specific costs + allocated shared costs + allocated overhead
Calculate for each portfolio company independently.
Example:
| Product | Direct Costs | Shared Allocation | Overhead Allocation | Total Burn | Revenue | Net Burn |
|---------|-------------|-------------------|--------------------:|------------|---------|----------|
| Vendly | $8,000 | $3,000 | $1,500 | $12,500 | $4,000 | $8,500 |
| Autograph | $12,000 | $4,000 | $1,500 | $17,500 | $2,000 | $15,500 |
| The Initiated | $5,000 | $2,000 | $1,500 | $8,500 | $500 | $8,000 |
| Antigravity | $15,000 | $5,000 | $1,500 | $21,500 | $1,000 | $20,500 |
| TwntyHoops | $4,000 | $1,500 | $1,500 | $7,000 | $3,000 | $4,000 |
| TOTAL | $44,000 | $15,500 | $7,500 | $67,000 | $10,500 | $56,500 |
BURN RATE TREND
Track month-over-month:
Burn increasing + revenue flat = problem
Burn stable + revenue growing = healthy
Burn decreasing + revenue growing = excellent
Burn increasing + revenue increasing faster = acceptable (investing in growth)
Rule: if net burn increases 3 months in a row without corresponding revenue growth, something is wrong
Model four scenarios — always. Present all four to leadership.
CONSERVATIVE (plan for this)
Revenue: flat (no growth from current level)
Costs: grow 5% per quarter (hiring, infrastructure scaling)
Assumption: worst realistic case without catastrophic events
BASE CASE (budget to this)
Revenue: grows at current MoM rate
Costs: stable (current run rate maintained)
Assumption: things continue as they are today
OPTIMISTIC (don't count on this)
Revenue: accelerates (e.g., 2x current growth rate)
Costs: stable or slight increase
Assumption: a key bet pays off (new customer segment, viral growth, enterprise deal)
ZERO REVENUE (survival mode)
Revenue: $0 (all customers churn or product fails)
Costs: current level (before any cuts)
Assumption: how long can we survive with zero income?
SCENARIO TABLE
| Scenario | Monthly Burn | Monthly Revenue | Net Burn | Runway (months) |
|----------|-------------|----------------|----------|-----------------|
| Conservative | $X | $X | $X | X |
| Base Case | $X | $X | $X | X |
| Optimistic | $X | $X | $X | X |
| Zero Revenue | $X | $0 | $X | X |
SCENARIO PROJECTIONS (12-month)
For each scenario, project month-by-month:
| Month | Revenue | Expenses | Net Burn | Cash Balance |
|-------|---------|----------|----------|-------------|
| 1 | $X | $X | $X | $X |
| 2 | $X | $X | $X | $X |
| ... | | | | |
| 12 | $X | $X | $X | $X |
Highlight:
⚠ Months where runway dips below 6 months (DANGER ZONE — start fundraising)
🔴 Months where runway dips below 3 months (CRITICAL — execute cost cuts immediately)
✅ Month where cash flow turns positive (break-even achieved)
PER-PRODUCT BREAK-EVEN
For each product, calculate:
Break-even revenue = product-specific costs + allocated shared costs + allocated overhead
Break-even MRR = break-even revenue (if subscription model)
Break-even customers = break-even MRR / ARPU
Example:
| Product | Monthly Cost (allocated) | Current Revenue | Gap | Break-Even Customers |
|---------|------------------------|-----------------|-----|---------------------|
| Vendly | $12,500 | $4,000 | -$8,500 | 250 merchants @ $50 |
| Autograph | $17,500 | $2,000 | -$15,500 | 35 clinics @ $500 |
| The Initiated | $8,500 | $500 | -$8,000 | 160 recruits @ $53 |
| Antigravity | $21,500 | $1,000 | -$20,500 | 22 enterprises @ $1,000 |
| TwntyHoops | $7,000 | $3,000 | -$4,000 | varies (ads + events) |
PORTFOLIO BREAK-EVEN
Total monthly cost: $67,000
Total monthly revenue: $10,500
Gap: $56,500
Portfolio break-even: need $67,000/month total revenue across all products
TIME TO BREAK-EVEN (at current growth rates)
Calculate for each scenario:
months_to_breakeven = months until cumulative revenue >= cumulative costs
If growth rate insufficient to reach break-even before cash runs out:
→ either raise capital or cut costs. There is no third option.
SENSITIVITY ANALYSIS
What moves the break-even date the most?
| Change | Break-Even Impact |
|--------|------------------|
| Add 1 engineer ($12K/mo) | +X months to break-even |
| Cut 1 engineer | -X months to break-even |
| Double marketing spend | +X months (if CAC payback > 6 months) |
| 50% revenue acceleration | -X months to break-even |
| Reduce AI API costs 40% | -X months to break-even |
| Sunset lowest-performing product | -X months to break-even |
Rule: headcount is almost always the largest lever. One hire can move break-even by months.
TIER 1 — EASY WINS (implement this week, minimal disruption)
Action Estimated Monthly Savings
──────────────────────────────────────────────────────────────
Audit and cancel unused SaaS $200-1,000
Downgrade dev/staging environments $100-500
Remove unused cloud resources $100-500
Switch to annual billing (savings) $100-300
Optimize AI model routing $200-2,000
(use Haiku/4o-mini for simple tasks instead of Opus/GPT-4)
Enable Firebase offline caching $50-200 (reduced reads)
Delete unused Cloud Functions $50-100
Total Tier 1 potential: $800-4,600/month
TIER 2 — MODERATE EFFORT (implement this month, some process change)
Action Estimated Monthly Savings
──────────────────────────────────────────────────────────────
Implement AI response caching $500-3,000
Right-size Cloud Function memory $200-1,000
Reduce marketing spend to $1,000-5,000
highest-ROI channels only
Renegotiate vendor contracts $200-1,000
Move from per-seat to team plans $100-500
Consolidate monitoring/observability $100-300
Reduce CI/CD build minutes $50-200
Total Tier 2 potential: $2,150-11,000/month
TIER 3 — HARD DECISIONS (implement if runway < 6 months)
Action Estimated Monthly Savings
──────────────────────────────────────────────────────────────
Reduce headcount (last resort) $8,000-15,000 per person
Pause hiring for open roles $10,000-15,000 per role
Sunset underperforming product $5,000-20,000
Reduce founder compensation $2,000-10,000
Close office / go fully remote $2,000-5,000
Defer contractor work $3,000-10,000
Total Tier 3 potential: $30,000-75,000/month
NEVER CUT:
- Security and compliance tooling (breach costs >> tool costs)
- Core product quality (shipping broken product kills retention faster than saving money)
- Customer support response time (churn accelerates when support degrades)
- Legal essentials (D&O insurance, corporate counsel retainer)
- Data backups (losing data is existential)
12-MONTH CASH FLOW PROJECTION — [COMPANY/PORTFOLIO]
Date: [TODAY]
Starting Cash: $[X]
| | Month 1 | Month 2 | Month 3 | ... | Month 12 |
|---|---------|---------|---------|-----|----------|
| REVENUE | | | | | |
| Vendly | $X | $X | $X | | $X |
| Autograph | $X | $X | $X | | $X |
| The Initiated | $X | $X | $X | | $X |
| Antigravity | $X | $X | $X | | $X |
| TwntyHoops | $X | $X | $X | | $X |
| **Total Revenue** | **$X** | **$X** | **$X** | | **$X** |
| | | | | | |
| EXPENSES | | | | | |
| Salaries & Benefits | $X | $X | $X | | $X |
| Contractors | $X | $X | $X | | $X |
| Cloud Infrastructure | $X | $X | $X | | $X |
| AI API Costs | $X | $X | $X | | $X |
| Marketing | $X | $X | $X | | $X |
| Software & Tools | $X | $X | $X | | $X |
| Legal & Accounting | $X | $X | $X | | $X |
| Insurance | $X | $X | $X | | $X |
| Other | $X | $X | $X | | $X |
| **Total Expenses** | **$X** | **$X** | **$X** | | **$X** |
| | | | | | |
| **Net Cash Flow** | **$X** | **$X** | **$X** | | **$X** |
| **Ending Balance** | **$X** | **$X** | **$X** | | **$X** |
| **Runway (months)** | **X** | **X** | **X** | | **X** |
STATUS FLAGS:
Runway > 12 months: HEALTHY — focus on growth
Runway 9-12 months: MONITOR — begin fundraise prep
Runway 6-9 months: DANGER — actively fundraise, prepare Tier 1-2 cuts
Runway 3-6 months: CRITICAL — execute cuts NOW, emergency fundraise
Runway < 3 months: EXISTENTIAL — Tier 3 cuts, bridge financing, or wind-down planning
ASSUMPTIONS (document every assumption — this is what investors will challenge):
- Revenue growth rate per product: [X]% MoM
- Hiring plan: [X] new hires in months [X-X]
- Infrastructure cost growth: [X]% per quarter
- Marketing spend: $[X]/month (constant / growing / seasonal)
- One-time costs: [list any expected one-time expenses]
- Fundraise timing: $[X] expected in month [X] (model with AND without this)
USE THIS FRAMEWORK WHEN RUNWAY IS TIGHTENING
RAISE CAPITAL IF:
✅ Runway < 9 months AND growth rate justifies investor confidence
✅ You have product-market fit signals (retention, NPS, revenue growth)
✅ The raise will fund a clear milestone (not just "more time")
✅ Market conditions support fundraising (check recent comparable rounds)
Rule: start the process at 9 months runway. It takes 3-6 months to close.
CUT COSTS IF:
✅ Runway < 6 months AND no raise is imminent
✅ Growth has stalled and spending isn't driving improvement
✅ You can cut without destroying the product that's working
Rule: cut once, cut deep. Multiple small cuts destroy morale worse than one decisive action.
DOUBLE DOWN IF:
✅ A product is at an inflection point (growth accelerating, retention improving)
✅ Unit economics are healthy (LTV:CAC > 3:1, gross margin > 60%)
✅ Increased investment has a clear causal link to faster growth
✅ You have runway to absorb the increased burn (> 12 months after increase)
Rule: only double down on one product at a time. Spreading capital across five bets dilutes all of them.
SUNSET A PRODUCT IF:
✅ Product has been live > 6 months with no path to sustainability within 2 quarters
✅ Retention is poor (<20% month-1 retention) and not improving
✅ The team's time would create more value on another product
✅ Customers can be migrated or wound down gracefully
Rule: sunsetting is not failure — it's capital allocation discipline.
Rule: communicate the decision to the team with honesty and a clear plan for redeployment.
PORTFOLIO PRIORITIZATION (for multi-product studios)
Rank products quarterly on:
1. Revenue trajectory (growing, flat, declining)
2. Unit economics (healthy, break-even, negative)
3. Market opportunity (large and growing, niche, shrinking)
4. Team strength (A-team, adequate, struggling)
5. Strategic value (core to studio thesis, adjacent, experiment)
Allocate capital proportionally. The product with the best combination gets the most resources.
Never split resources equally across products — that guarantees mediocrity everywhere.
Generate using Write:
docs/burn-rate-report.md — current month analysis with scenariosdocs/cash-flow.md — 18-month runway projectionmonitoring/budget-alerts.json — alert thresholds for cloud spendBURN RATE ANALYSIS — [COMPANY/PORTFOLIO]
Date: [TODAY]
Period: [MONTH/QUARTER/YEAR]
SUMMARY
┌──────────────────────────┬────────────────────────────────────┐
│ Field │ Value │
├──────────────────────────┼────────────────────────────────────┤
│ Cash Balance │ $[X] │
│ Monthly Gross Burn │ $[X] │
│ Monthly Revenue │ $[X] │
│ Monthly Net Burn │ $[X] │
│ Runway (base case) │ [X] months │
│ Runway (conservative) │ [X] months │
│ Burn Rate Trend │ [Increasing / Stable / Decreasing] │
│ Break-Even Target │ $[X] MRR │
│ Months to Break-Even │ [X] months (base case) │
│ Status │ [HEALTHY / MONITOR / DANGER / CRITICAL] │
└──────────────────────────┴────────────────────────────────────┘
DELIVERABLES GENERATED:
- [ ] Per-product burn rate breakdown with allocation
- [ ] Four-scenario runway projection (conservative, base, optimistic, zero-revenue)
- [ ] 12-month cash flow projection
- [ ] Break-even analysis per product and portfolio
- [ ] Sensitivity analysis (what moves break-even most)
- [ ] Cost reduction playbook (Tier 1/2/3 with estimated savings)
- [ ] Decision framework recommendation (raise / cut / double down / sunset)
RECOMMENDED ACTION:
[Based on runway and growth trajectory, recommend the primary action]
RELATED SKILLS:
- /saas-financial-model — unit economics and pricing model per product
- /engineering-cost-model — infrastructure cost breakdown
- /finops — cloud cost optimization (Tier 1-2 cost reductions)
- /fundraising-materials — if the recommendation is to raise capital
- /portfolio-registry — portfolio-level product tracking