Runway Calculator

Cash runway is how long a startup can operate before cash runs out at the current spending rate. Runway (months) = cash on hand ÷ monthly net burn. Net burn is cash out minus cash in each month — for pre-revenue companies, burn is usually total operating expenses minus any revenue collected.

Founders track runway to time fundraising, hiring, and cost cuts. Investors often ask for 18–24 months of runway after a round. This calculator assumes flat burn — real spend varies with payroll cycles, annual contracts, and revenue ramps. Zero or negative burn means runway is undefined (cash grows or holds steady).

Example: $500,000 in the bank and $45,000 monthly net burn → runway ≈ 11.1 months (~333 days). If burn drops to $35,000 after cuts, runway extends to about 14.3 months without new cash. Start fundraising before runway hits 6 months if venture timelines apply.

Gross burn counts total cash out the door; net burn subtracts revenue and other cash inflows. A company spending $80,000/month with $20,000 in monthly revenue has $60,000 net burn even if engineering payroll alone is $50,000. Investors usually care about net burn because it reflects how fast the bank balance shrinks.

Runway is a snapshot, not a forecast. Hiring two engineers next quarter, renewing annual SaaS contracts, or closing an enterprise deal can move burn sharply. Model best-case and worst-case burn bands instead of trusting a single flat number for board reporting.

Bridge rounds, venture debt, and credit lines extend runway without changing the core formula — add available committed capital to cash on hand if you plan to draw it. Debt service (interest and principal) should appear inside burn once repayments start.

Worked example with revenue: $750,000 cash, $120,000 monthly gross spend, $35,000 monthly revenue → net burn $85,000 → runway ≈ 8.8 months. Cutting gross spend to $95,000 while holding revenue flat pushes runway to about 11.5 months.

Many seed-stage startups target 18–24 months post-raise so they can hit milestones before the next round. If your runway calculator shows under 9 months and you are venture-backed, update your hiring plan and begin investor conversations early — rounds often take 3–6 months to close.

This tool does not model accounts receivable timing, inventory builds, or tax payments. Cash-basis burn from your bank statement is the most honest input for early-stage planning.

Scenario planning beats a single runway number. Model a base case, a hiring plan case, and a recession case with 20–30% higher burn to see how quickly safety margins disappear.

Founders sometimes confuse profitability with runway. A company can be EBITDA-positive on paper but still burn cash if working capital, inventory, or deferred revenue timing pulls cash out faster than accounting profit suggests.

Investor updates often cite "months of runway at current net burn." Keep the inputs consistent month to month so your board sees real trends rather than one-off snapshots after large vendor payments.

Default-alive vs default-dead framing (Paul Graham) asks whether you reach profitability on current trajectory before cash hits zero — runway tells you time; default-alive tells you direction.

Monthly close discipline keeps burn accurate — reconcile bank, payroll, and credit card feeds within five days of month end so runway slides are not stale in board decks.

Series A milestones (ARR targets, product launches) should align with runway remaining — boards often ask for a 24-month plan showing burn stepping down as revenue ramps rather than flat burn forever.

Weekly cash reporting beats monthly surprises — founders who review bank balance and burn every Monday catch payroll and vendor spikes before they compress runway unnoticed.

Investors sometimes ask for runway "with and without" planned hiring — model both so you can show how new roles compress months remaining if revenue stays flat.