What Is Startup Runway?

Runway is the number of months a company can keep operating before its cash reserves hit zero, assuming current income and spending. If you hold $750,000 and lose a net $55,000 per month, your runway is 13.6 months. It is the metric that converts your burn rate from an abstract dollar figure into the only unit founders truly operate in: time. Every strategic decision — hiring, pricing, fundraising, pivoting — happens inside the window your runway defines.

How Runway Is Calculated

The simple division works when your burn is flat, but real burn rarely stays flat — salaries rise, teams grow, rent increases. This calculator therefore also models compounding expense growth: enter even a modest 3% monthly growth and you'll see runway shrink dramatically compared with the flat-burn estimate. That gap between the two figures is the planning error that catches most first-time founders.

What Is a Good Runway?

• 12–18 months is the standard healthy benchmark, and the figure most venture investors expect a fresh funding round to provide
• 18–24 months became the preferred cushion in tighter funding markets, giving room to miss a milestone and still raise
• Under 6 months is the danger zone: since a fundraise typically takes 3–6 months end-to-end, you are effectively raising from a position of desperation — and investors can tell
• The practical rule: start raising when 9–12 months remain, so negotiations conclude while you still have leverage

How to Use This Calculator

Enter your cash balance, monthly operating expenses, and monthly collected revenue (leave blank if pre-revenue). Optionally add a monthly expense growth percentage that reflects your hiring plan. The results show runway under both flat and growing burn, your projected zero-cash date, the month you should start fundraising, and how much cash you'll have left in six months. The verdict grades your position against the 12–18 month benchmark used across the venture industry, including in Y Combinator's founder guidance.

Worked Example

A startup holds $750,000, spends $80,000 per month, and collects $25,000 in revenue — a net burn of $55,000. Flat-burn runway is 13.6 months: healthy. But add a 4% monthly expense growth from planned hires and runway drops to roughly 11 months, with the zero-cash date pulled forward by almost a quarter. Same bank balance, very different fundraising timeline — which is exactly why modelling growth matters.

Why You Shouldn't Count Future Revenue

This calculator deliberately holds revenue flat rather than projecting growth. Forecast revenue is hope; expenses are contracts. Payroll, rent, and software bills arrive on schedule whether or not customers do. Planning runway on conservative revenue means every upside surprise extends your life — planning on optimistic revenue means every miss shortens it. As standard treatments of burn and runway note, the metric exists precisely to answer the worst-case question.

Five Ways to Extend Runway

• Cut before you're forced to: a 15% expense cut at 10 months of runway buys more time than a 40% cut at 4 months
• Move customers to annual prepay: cash arrives 12 months early without changing your P&L
• Improve gross margin: renegotiate hosting and vendor costs; check the effect with our profit margin calculator
• Trim acquisition spend to efficient channels only — your CAC and LTV figures tell you which ones qualify
• Consider venture debt or revenue-based financing as a bridge — cheaper than equity when used to reach a clear milestone

Frequently Asked Questions