Runway
How many months your startup can operate before running out of cash.
Definition
Runway is the number of months a startup can continue operating at its current burn rate before exhausting its cash reserves. It is calculated by dividing current cash by monthly net burn (cash out minus cash in). Runway determines your survival timeline and dictates when you need to fundraise, cut costs, or reach profitability. Most founders track runway continuously and model multiple scenarios.
Why It Matters
Running out of cash is the number one reason startups fail. Knowing your runway with precision is the most fundamental financial discipline a founder can have. With less than 6 months of runway, you should already be fundraising. With 18+ months, you have the space to focus on building.
Example
If you have $600,000 in the bank and your monthly net burn is $40,000, your runway is 600,000 ÷ 40,000 = 15 months.
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