Before you cut burn, start from the runway you need and work backward to the monthly burn that delivers it, then check that your planned levers reach that number against current spending, on a timeline the cash can survive. Paste the target and the reason for it, current monthly burn and cash, the proposed levers with amounts and start dates, the list of work you intend to protect, and your revenue forecast into one request. Instruct Pingpong to rebuild the gap, test whether each lever saves money against actual spending or only against budget, and show when the savings reach the bank. Ask what the board and the team should hear, and review your written answers in a second round.
This page is for chief executives, chief financial officers, and directors deciding whether to commit to a burn reduction program and how large it should be. Executive starting points live under Pingpong for executives.
Work backward from the target
- Choose the runway, and say why. Months to the next raise plus a buffer for a slow process, or months to profitability. A target without a reason invites a second cut later.
- Convert it to monthly burn. Cash divided by target months, adjusted for any minimum balance a lender requires.
- Name what you protect. The few teams, customers, and bets the company's future depends on. Everything else is in scope.
- Measure each lever against current spending. A hiring freeze saves nothing against today's burn, because those people are not on payroll yet. It only stops burn from rising.
- Date each saving. Contract renewals, notice periods, and severance delay the effect, and some cuts raise cash out in the first month.
- Size it once. Plan one reduction large enough to reach the target, so the team does not face a second round a few months later.
A worked example
This example is illustrative and does not describe a customer. A 200-person legal software company has $40 million in cash and burns $2.8 million a month, about 14 months of runway. The board wants 24 months without a new raise, which means monthly burn of about $1.7 million.
The draft plan cuts $1.1 million a month: a hiring freeze worth $300,000, vendor reductions of $250,000, marketing cuts of $200,000, and $350,000 labeled "operating efficiencies." The chief financial officer pastes the plan, the burn breakdown, vendor renewal dates, the hiring plan, the revenue forecast, and the protected list.
A useful pass finds that the hiring freeze is measured against the budget instead of current spending, so it lowers today's burn by nothing. Most of the vendor savings come from annual contracts that renew over the next six months. The $350,000 in efficiencies has no detail at all. Against current burn, the plan delivers about $450,000 a month within a quarter, well short of the $1.1 million needed.
The pass also notes that burn is net of revenue, so the plan depends on revenue growing as forecast. If growth slows by half, monthly burn rises by about $150,000 and the gap widens. The protected AI drafting team is the right call, but its cloud costs are rising by about $80,000 a month and are not in the model.
The chief executive and chief financial officer revise the plan. The target becomes 20 months, with the reason stated: two more quarters of product results before raising, plus a six-month buffer. The levers are restated against current spending, with a month-by-month cash curve that includes severance. Reaching the target now requires a reduction of about 30 roles alongside the vendor and marketing cuts, so the team works through the readiness check before announcing layoffs. The AI team and enterprise support stay protected, and cloud costs get a monthly cap. The board is asked to approve the target, the mix of levers, and the protected list, and the team will hear about one reduction, sized to hold.
To turn the result into the cash section of the board deck, see war-game a cash runway brief before the number reaches the board.
A request you can copy
Below are our runway target and the reason for it, current cash and monthly burn, our proposed levers with amounts and start dates, the work we plan to protect, and our revenue forecast. Work backward from the target to the monthly burn it needs. Test each lever against current spending rather than budget, and date when each saving reaches our cash. Show a month-by-month cash curve including one-time costs. Flag protected areas with rising costs, savings without detail, and any dependence on revenue growth. Stop there so we can answer in writing, then review our answers.
How Pingpong runs the review
The web review app sends your request through several models in order. Each later model receives the original request and every earlier answer, with instructions to assess the work so far. For the steps inside the app, see running your first review.
What a model can't review
A model does not know which vendors will renegotiate early, how your teams will respond, or how investors will read the plan. Your finance team owns the numbers, and you and the board own the decision.
When the program goes to the board, see war-game a decision before the board meeting. More guides live under work decisions before you commit.