Formula
runway (months) = cash on hand / net monthly burn
Runway
Also known as Cash runway
Runway is the number of months a company can keep operating before it runs out of cash, at its current rate of spending.
Worked example
€400,000 in the bank with €35,000 of net monthly burn is 11.4 months of runway.
Benchmark
Most investors expect 18 to 24 months after a round. Below 6 months you are raising from a weak position.
Runway is the most consequential number in an early company, because it converts every other decision into a deadline. A hire, a tool, a marketing budget: each one shortens it, and the question is always whether the thing bought moves the company further than the months it cost.
It is computed from net burn, not gross spending. A company spending €52,000 and collecting €28,000 burns €24,000, and its runway reflects the €24,000. Companies that quote runway off gross spend understate it, sometimes badly.
The figure is only as current as its inputs. A runway calculated from a spreadsheet last updated six weeks ago is not a runway, it is a memory.
Related terms
Keep this number live
Plainhub computes runway from money you record in plain words, so it is current when you need it rather than the night before a board meeting.
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