Founder Glossary · Financial Projection
How many months you have.
What it is
Runway is the number of months your company can keep operating at its current net burn before the cash runs out.
Runway (months) = cash in the bank ÷ monthly net burn
An example
A company holds $180,000 and burns $18,000 a month net. Its runway is $180,000 ÷ $18,000 = 10 months. (Illustrative figures.)
Why it matters
Runway tells you how long you have to reach the next milestone that changes your position, whether that is profitability or the next round of funding. Many founders aim for 18 to 24 months of runway after raising money, and start raising again with at least six months left, because fundraising usually takes longer than planned.
How to extend it
- Lower net burn by cutting costs that do not move a key number.
- Grow revenue, especially recurring revenue.
- Collect what you are owed faster.
- Pursue funding that does not cost ownership, such as grants.
Common mistakes
- Dividing by gross burn one month and net burn the next.
- Assuming burn stays flat while you plan to hire.
- Counting money that has been promised but not received.
Related terms: Burn Rate · Break-Even Point · Bootstrappers
Offers welcome. Offers of tangible trade (goods, services, or payment) to buy or license this work can be sent to sales@leasethebox.com. An offer creates no obligation on either side, and nothing on this page promises any return, result, or acceptance.
Disclaimer. This page is for education and information only. It is not legal, financial, tax, or investment advice; talk to a qualified professional before acting on it. Systems, tiers, and services described on this site may be in development and are not necessarily live. Illustrations marked “Bespoke Singularity” are AI-rendered artistic interpretations, and some scenes may be dramatized.