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Growth looks good. Do the economics?
Model pricing-plan profitability, hiring costs, burn rate, cash runway, and funding needs. See how rising AI usage changes your margins, then export the assumptions with the numbers for your next investor conversation.
Illustrative example / Flat growth / USD
Consider an AI startup with 100 paying customers at $99 per month. Each customer uses 1,000 AI units costing $0.02 each, plus $5 in other variable delivery costs. Fixed delivery costs are $1,500 per month, operating expenses are $18,000, and starting cash is $200,000.
For this example, acquisition, churn, usage growth, inference unit-cost changes, and expense growth are all zero. This deliberately differs from the growing-business sample loaded in the calculator.
| Metric | Calculation | Result |
|---|---|---|
| Revenue | 100 × $99 | $9,900 |
| COGS | 100 × (1,000 × $0.02 + $5) + $1,500 | $4,000 |
| Gross margin | (Revenue − COGS) ÷ revenue | 59.6% |
| Gross burn | COGS + $18,000 operating expenses | $22,000 |
| Net burn | Gross burn − revenue | $12,100 |
Without hiring, cash first falls below zero in month 17. Now add one engineer in month 3 at $8,000 per month fully loaded, plus $2,000 in one-time setup costs. Month 3 net burn becomes $22,100, and subsequent monthly net burn is $20,100. Cash now runs out in month 11.
The engineer is classified as an operating expense here, so gross margin stays unchanged while runway shortens. A direct-delivery hire would also reduce gross margin. Revenue and expenses are assumed collected and paid in the same month.
Actively raising funds? Read our guide to building a startup financial model for fundraising, including pricing-plan scenarios and an investor preparation checklist.
Revenue = active customers × monthly revenue per customer. In plan mode, revenue per customer = subscription price + max(0, expected usage − included units) × overage rate. Estimated COGS = inference costs + other variable delivery costs + fixed delivery costs + direct-delivery hiring costs. Gross profit = revenue − COGS; gross margin = gross profit ÷ revenue when revenue is positive.
Customer acquisition is new customers as a percentage of the previous month’s customer base. Churn applies to that same opening base. Customer counts are expected values and may be fractional. Usage and inference unit costs compound independently; subscription price stays fixed. Each plan uses its own acquisition and churn rates, with no automatic migrations between plans.
Direct-delivery hires and their setup costs add to COGS; other hires add to operating expenses. Gross burn = COGS + operating expenses. Net burn = max(0, gross burn − revenue). Monthly net cash flow = revenue − gross burn. Scheduled new-hire costs stay flat, while the expense-growth assumption applies to baseline operating expenses.
Closing cash = previous cash + monthly net cash flow. Runway is the first projected month with zero or negative cash; it is not interpolated within the month. Negative cash illustrates a funding gap, not an assumption that the business can keep operating unfunded. Additional funding = max(0, end-period monthly net burn × buffer months − lowest projected cash balance). Existing cash reduces that need.
Revenue is assumed collected and costs paid in the same month. This simplified model excludes taxes, financing, debt payments, capital expenditure, deferred revenue, and working-capital timing. Classify only delivery-related expenses as COGS and exclude them from operating expenses to avoid double counting. Scenarios are illustrative sensitivities, not predictions or industry benchmarks.
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It estimates revenue, delivery costs, gross margin, customer contribution, operating cash flow, runway, and additional funding needs over 12 or 24 months. You can model individual pricing plans and future hires, then compare base, upside, and downside scenarios.
For this model, enter inference costs, variable production hosting and third-party services, and direct delivery or support costs. Keep R&D, sales, marketing, and general administration in operating expenses. Do not include the same expense in both places. The resulting gross margin is an estimate based on the costs you supply.
Gross burn is total modeled monthly cash outflow: COGS plus operating expenses, including scheduled hiring costs. Net burn is that outflow minus revenue, floored at zero. If revenue exceeds outflow, the model shows positive cash flow rather than negative net burn.
Starting cash is updated each month by adding revenue and subtracting modeled cash expenses. Runway ends in the first month closing cash reaches zero or below. Unlike dividing cash by current burn, this projection accounts for changing customer counts, usage costs, and hiring. A result beyond the forecast horizon does not mean unlimited runway.
Each plan has its own subscription price, included usage, expected usage, overage rate, inference cost, other variable costs, acquisition, and churn. Revenue per customer is subscription price plus usage above the allowance multiplied by the overage rate. Plan contribution excludes shared fixed delivery and hiring costs; company gross margin includes delivery costs. No automatic plan upgrades are assumed.
A hire starts at the beginning of the selected month. Fully loaded monthly costs recur through the forecast, and setup costs are charged once per person. Delivery hires increase COGS; other hires increase operating expenses. The results compare cash depletion with and without the scheduled hires. Existing staff should already be in baseline expenses.
Yes. Download a 16:9 PNG or SVG summary slide and a CSV of all three scenarios. The slide labels the baseline and hypothetical forecast and includes key assumptions. These are planning projections, not verified financial statements or a valuation.
The tool is free and requires no login. Financial calculations and exports happen in your browser; this financial model does not upload your entered figures. Categorical usage events may be sent to analytics. Refreshing the page clears your entries.