Cash Runway
The number of months a company can continue operating at its current burn rate before running out of cash.
Why it matters
Runway is existential for startups. It determines when you need to raise, cut costs, or become profitable. Most VCs want to see 18-24 months of runway post-funding.
Formula
Divide your current cash balance by your monthly burn rate. The result is the number of months you can operate before running out of cash.
Calculator
What's a good Runway?
Comfortable: 18-24 months. Caution: 12-18 months. Urgent: <12 months. Start fundraising at 6-9 months.
Related metrics
Burn Rate
FinanceThe rate at which a company spends money in excess of income, typically measured monthly.
Growth Rate
FinanceThe percentage increase in revenue over a specific period, typically measured month-over-month or year-over-year.
NPM
FinanceThe percentage of revenue that remains as profit after all expenses, taxes, and costs are deducted.