Startups & Business › Metrics & Unit Economics

Runway

How many months until the money runs out at the current burn rate.

Also known as: runway, cash runway, months of runway

Runway is cash divided by net monthly burn: how long the company survives if nothing changes. Twelve months means a year to reach milestones, raise, or become profitable; four months means fundraising or revenue starts this quarter. Every strategic conversation begins here, whether stated or not.

$800k cash ÷ $80k net burn/mo = 10 months runway
rule: start raising with 9–12 months left (raises take quarters, not weeks)

The number moves with both sides — cash (raises, revenue spikes, loans) and burn (hires, cuts, growth spend). Update it monthly; a runway computed last quarter is nostalgia. And distinguish company runway from personal runway — the shorter governs (personal runway).

The classic mistakes:

• Raising at six months. Fundraising takes three to six months when it goes well. Starting with half a year left surrenders all leverage — investors smell deadlines. Start at nine-plus.
• Static math. Runway math assumes constant burn; hiring plans, annual prepayments and seasonal revenue all bend it. Project, don’t divide once.
• Ignoring the raise-or-die date. With ten months left and no path to revenue covering burn, the fundraise is not optional. Name the decision date for plan B (cuts, bridge, shutdown) while options still exist.
• Vanity runway. Counting committed-but-unwired money, founder loans as revenue, or best-case sales as cash. Runway counts cleared cash against honest burn — nothing else.
• No contingency. One bad quarter (churn spike, lost deal, outage) eats months. Plan buffers: what gets cut at eight months, at five, at three — decided calmly in advance.

The rhythm: monthly recompute, quarterly strategy check against milestones, fundraise trigger at nine-plus months. Runway is the countdown every other decision races — see default alive for the verdict it frames.