How do you calculate startup runway?

Startup runway is calculated by dividing your current cash balance by your monthly net burn rate (expenses minus revenue). For example, $500K cash with $50K monthly burn = 10 months of runway.

What is a good runway for a startup?

Most VCs recommend 18-24 months of runway after a fundraise. At minimum, aim for 12 months. Start fundraising when you have 9-12 months of runway remaining.

What is net burn rate?

Net burn rate is your total monthly expenses minus monthly revenue. If you spend $80K/mo and earn $30K/mo, your net burn is $50K/mo. This determines how fast you consume cash.

What is the difference between gross burn and net burn?

Gross burn is total monthly cash outflow: everything you spend, regardless of revenue. Net burn subtracts monthly revenue from gross burn. Investors usually care about net burn because it shows actual cash consumption, but gross burn matters when projecting downside scenarios.

How does runway change if I'm growing?

Static runway assumes today's burn forever, but real startups grow revenue and expenses every month. Use a 24-month model that compounds both: revenue growing at your MoM rate, expenses growing with hiring and infrastructure. Plug-and-play calculators show single-point runway; full operating models show breakeven dates.

Should I include AR or AP in runway?

Cash runway is calculated on the bank balance, not accrual P&L. Include cash in the bank (and treasury yield if material). Outstanding AR is not cash until collected; outstanding AP is real cash leaving in the next 30-60 days. For a tighter view, use a 13-week cash forecast that lays out receipts and disbursements by week.

When should I start fundraising based on runway?

Start fundraising when you have 9-12 months of runway remaining. A typical Series A or B raise takes 3-6 months of active process plus 1-2 months for closing and wire. Founders who wait until 4 months of runway are negotiating from weakness.

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Runway Calculator

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Runway Calculator

Adjust inputs to model your cash runway

Current Cash Balance ($)Monthly Expenses ($)Net burn = expenses − revenueMonthly Revenue ($)

Cash Balance Projection

Projected cash over 24 months

Monthly Burn Rate

Gross burn with average reference line

Runway (Months Remaining)

Based on current net burn rate

months remaining

Caution

Revenue vs Expenses

Monthly revenue compared to total expenses

Your runway of 14 months is in the caution zone. Consider optimizing burn rate or raising capital.

Cash Balance

$500,000

Monthly Burn

$50,000

Runway

14 months

Revenue

$15,000

Expenses

$50,000

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How much runway is normal? Default target is 18-24 months at most stages, 9-12 months as the floor before fundraising. See full runway + burn benchmarks by stage.

Frequently Asked Questions

How do you calculate startup runway?: Startup runway is calculated by dividing your current cash balance by your monthly net burn rate (expenses minus revenue). For example, $500K cash with $50K monthly burn = 10 months of runway.
What is a good runway for a startup?: Most VCs recommend 18-24 months of runway after a fundraise. At minimum, aim for 12 months. Start fundraising when you have 9-12 months of runway remaining.
What is net burn rate?: Net burn rate is your total monthly expenses minus monthly revenue. If you spend $80K/mo and earn $30K/mo, your net burn is $50K/mo. This determines how fast you consume cash.
What is the difference between gross burn and net burn?: Gross burn is total monthly cash outflow: everything you spend, regardless of revenue. Net burn subtracts monthly revenue from gross burn. Investors usually care about net burn because it shows actual cash consumption, but gross burn matters when projecting downside scenarios.
How does runway change if I'm growing?: Static runway assumes today's burn forever, but real startups grow revenue and expenses every month. Use a 24-month model that compounds both: revenue growing at your MoM rate, expenses growing with hiring and infrastructure. Plug-and-play calculators show single-point runway; full operating models show breakeven dates.
Should I include AR or AP in runway?: Cash runway is calculated on the bank balance, not accrual P&L. Include cash in the bank (and treasury yield if material). Outstanding AR is not cash until collected; outstanding AP is real cash leaving in the next 30-60 days. For a tighter view, use a 13-week cash forecast that lays out receipts and disbursements by week.
When should I start fundraising based on runway?: Start fundraising when you have 9-12 months of runway remaining. A typical Series A or B raise takes 3-6 months of active process plus 1-2 months for closing and wire. Founders who wait until 4 months of runway are negotiating from weakness.

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