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Runway

Also known as: cash runway

How many months your company can keep operating before it runs out of cash, at its current spending rate.

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 to 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 is a planning estimate that helps you decide 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; track it closely and raise or cut costs well before it hits zero.

How it helps you

Your survival countdown in months, and the number that tells you exactly when to start raising or cutting.

#finance#runway#cash#fundraising#burn#analytics#operations

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