Startup Runway

Projecting How Long Your Cash Will Last

Runway is how many months a business can keep operating before it runs out of cash, given its current cash on hand and net burn rate. Enter your cash on hand, monthly expenses, and (if any) monthly revenue, and this calculator shows your runway in months and the projected calendar date you’d run out of cash at the current rate.

Runway is one of the most-watched numbers at any pre-profitability company, since it sets a hard deadline: either revenue needs to grow, costs need to come down, or more money needs to be raised before the cash runs out. A business whose revenue already covers its expenses has no burn at all — it’s the net gap between the two that determines how long the clock actually runs.

Key Factors to Consider

• Fundraising itself takes real time, often several months from first pitch to money in the bank. Many advisors suggest starting a raise while there’s still 6 or more months of runway left, not waiting until the number gets uncomfortably low — the runway figure matters most as a planning deadline, not just a countdown to react to at the last minute.
• “Net burn” and “gross burn” are two different, commonly-used numbers. This calculator computes net burn (expenses minus revenue) — gross burn (total expenses alone, ignoring any revenue) is a separate figure some investors also ask about, so it’s worth knowing which one a specific conversation is referring to.
• A single month’s expenses or revenue can be misleading if it includes something unusual. A large one-time purchase, an annual software renewal, or a lump payment received can distort one month’s numbers — using an average across a few recent months for both figures gives a more representative runway estimate than a single recent month’s snapshot.
• Recalculate regularly, since burn rate itself tends to change as a business grows. New hires, shifting vendor costs, and revenue growth (or decline) all change the underlying inputs over time — treat this as a number to revisit monthly, not a one-time calculation to file away.

The Formula

$$\vD{\text{Net Monthly Burn}} = \vA{\text{Monthly Expenses}} - \vB{\text{Monthly Revenue}}$$ $$\text{Runway (months)} = \frac{\vC{\text{Cash on Hand}}}{\vD{\text{Net Monthly Burn}}}$$

When monthly revenue meets or exceeds monthly expenses, net burn is zero or negative — cash on hand isn’t depleting, so there’s no runway figure to compute.

Worked Example

$500,000 in cash on hand, $70,000 in monthly expenses, and $20,000 in monthly revenue:

1. Net monthly burn: $\vA{70,000} - \vB{20,000} = \vD{\$50,000}$.
2. Runway: $\vC{500,000} \div \vD{50,000} = 10 \text{ months}$.

At this rate, the business has 10 months before its cash on hand runs out — assuming expenses and revenue both stay at their current levels the whole time.

Common Mistakes

• Using gross burn instead of net burn. Ignoring revenue entirely (gross burn) understates runway for any business already generating some income — this calculator subtracts revenue from expenses first, since that net gap is what actually depletes cash on hand.
• Basing the calculation on one unusually high or low month. A single month with a big one-time purchase or a lump payment received skews the result — average expenses and revenue across a few recent months for a more representative figure.
• Treating the projected date as fixed rather than revisiting it. Burn rate changes as a business hires, cuts costs, or grows revenue — recalculating monthly catches those shifts before the actual cash-out date arrives sooner (or later) than expected.

Useful to Know

• Curious how much capital it took to get the business open in the first place? Startup Cost Calculator totals the one-time costs of launching.
• Want to know the revenue level where burn actually turns to profit? Break-Even Point Calculator finds the sales volume needed to cover costs exactly.
• Planning to add headcount, which will change your burn rate? Hiring Cost Calculator estimates the full cost of a new hire beyond just salary.