Runway

Runway is the number of months a startup can continue operating before it runs out of cash, given its current net burn rate. It is calculated by dividing the company's current cash balance by its monthly net burn.

For example, a company with $900,000 in the bank and a net burn of $75,000/month has 12 months of runway.

Runway is critical context for any fundraising conversation. Investors want to know how much time the current raise buys, and what milestone the company will reach before needing to raise again. The ideal raise extends runway to a clear, defensible milestone — typically 18–24 months — that justifies the next round at a higher valuation.

Founders should start raising a new round when they have 6–9 months of runway remaining. Raising too late — with less than 4 months of runway — puts founders in a weak negotiating position and signals poor financial planning to investors.

In a pitch deck, runway projections should be honest and grounded in realistic assumptions about hiring pace, customer acquisition costs, and revenue growth.