Free calculator · Venture & Startup Finance
Affordable Loss, the Constrained Founder’s Budget
Calculates an affordable-loss budget, the months of experimentation it buys, and the personal cash floor a founder keeps if the venture fails. Inputs are personal savings, the share of savings committed, monthly venture spend, and monthly side income.
By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026
From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.
AI training for finance teams · Consulting · The 10 Laws of Finance
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Affordable loss: budget the next experiment
Count only cash available after taxes, living costs, and other commitments. If outflow is already net of revenue, do not count that revenue again.
Estimated experiment runway
9.0 mo
chosen budget ÷ net monthly cash outflow
Affordable-loss budget
$10,800
savings × affordable-loss %
Unallocated savings
$7,200
savings − chosen budget
Net monthly outflow
$1,200
outflow − available offsets, floor of zero
Chosen share
60%
of personal savings, not all possible exposure
The default 60% is illustrative. Set a limit from actual obligations and loss capacity first. This estimate assumes steady cash flows and no separate upfront costs. It does not protect unallocated savings from liabilities, unexpected costs, or personal spending. Review the budget as conditions change.
Learn the concept
This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.
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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.