Cash Runway is the number of months a company can continue operating at its current net burn rate before it runs out of cash.
What is Cash Runway?
Runway is the clock every startup runs against. It dictates when you must raise, cut costs, or reach profitability — and conventional wisdom says start raising with 6–9 months left.
How to calculate Cash Runway
Worked example
You have $2,400,000 in the bank and burn $120,000 net per month. Runway = $2,400,000 ÷ $120,000 = 20 months.
What's a good Cash Runway?
Most venture-backed startups aim to keep 18–24 months of runway after a raise, leaving buffer to hit the milestones needed for the next round.
Frequently asked questions
Should runway use net or gross burn?
Net burn, because incoming revenue extends how long your cash lasts. As revenue grows, runway can extend even if spending is flat.
When should I start fundraising based on runway?
Commonly with 6–9 months left, since raising can take 3–6 months and you want margin for error.
Related metrics
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