Runway: how long your cash lasts

• Runway = cash ÷ monthly net burn.
• Use net burn (spending minus revenue), and update it monthly.
• Start fundraising well before runway gets short.
• Plan each round to fund milestones, not just months.

The formula

Runway (months) = cash on hand ÷ monthly net burn. Net burn is cash going out minus cash coming in. If spending is rising, use your forecast for the next few months rather than last month's figure.

Worked example (hypothetical)

You have $600,000 in the bank. You spend $70,000 a month and collect $20,000 in revenue, so net burn is $50,000. Runway is $600,000 ÷ $50,000 = 12 months. If you hire two engineers in month two and net burn rises to $75,000, runway drops to roughly 8 to 9 months. That changes when you need to start your next raise.

Runway and fundraising timing

Raising takes time: building a list, earning intros, meetings, diligence and closing. Work backward from the month your cash runs out, add a buffer for a slower-than-expected raise, and start outreach before that date. Our fundraising timeline lays out the steps.

Why it matters to a pre-seed or seed founder

Short runway weakens your negotiating position, because investors can tell when you need to close. Raise enough to reach milestones that justify the next round, and track runway monthly in your investor updates. If runway gets tight before you've hit those milestones, consider a bridge round.