What it is
Runway is the number of months your business can survive before the cash runs out, given how much money you have and how fast you spend it.
Facts
- Runway (months) = Cash on hand / Net monthly burn.
- Example: $600k in the bank and $50k net burn per month = 12 months of runway.
- Founders commonly aim to raise enough for 18-24 months of runway.
- Runway lengthens if you cut burn or grow revenue; it shrinks as spending rises.
Who it's for
Every founder, especially venture-backed startups spending more than they earn.
How it helps you
Runway tells you your deadline: when to raise, when to cut costs, and whether a hire or spend is affordable given your remaining time.
Caveats
Use net burn (after revenue), not gross. Start fundraising with several months of runway left, raising with under three months of cash weakens your negotiating position badly.
Conclusion
Runway is your survival countdown; know it precisely and raise or cut costs well before it hits zero.