Startup Runway Calculator

Startup runway is the amount of time a company has before it runs out of cash, given its current burn rate and cash on hand. It is the critical constraint defining how long a startup has to achieve its next milestone — whether that is product launch, revenue targets, profitability, or the next fundraising round — before needing to either become self-sustaining or raise additional capital. Runway is typically measured in months.

Burn rate comes in two forms. Gross burn is the total monthly cash spent on all expenses. Net burn is gross burn minus monthly revenue, representing the actual cash deficit each month. A startup spending $80,000/month on expenses while generating $20,000/month in revenue has a net burn of $60,000/month. With $600,000 in cash, its simple runway is 10 months. The formula is: Simple Runway = Cash Balance ÷ Net Monthly Burn Rate.

The simple runway calculation assumes both expenses and revenue remain constant, which is rarely realistic. This calculator models three scenarios based on your current revenue growth rate (pessimistic, base, and optimistic) to show how accelerating or decelerating revenue growth changes your cash-out date. Growing revenue reduces net burn each month, potentially extending runway significantly. Conversely, slower-than-expected revenue growth can cut runway far shorter than simple calculations suggest.

Step 1: Enter cash balance. This is your current total cash on hand — all liquid assets available to fund operations. Include checking, savings, and any immediately accessible investments. Do not include accounts receivable until collected or credit lines until drawn.

Step 2: Enter monthly expenses. Use your total cash outflows each month: payroll, rent, software, marketing, professional services, and any other operating costs. Use a 3-month average if expenses vary seasonally, or use next month's planned budget for forward-looking analysis.

Step 3: Enter monthly revenue. Use the current month's actual or most recently closed MRR (Monthly Recurring Revenue) for subscription businesses, or trailing 3-month average revenue for businesses with variable income. Revenue reduces your net burn each month.

Step 4: Set revenue growth rate. Enter your monthly revenue growth rate expectation for the base scenario. The calculator automatically models a pessimistic scenario at half your growth rate and an optimistic scenario at 1.5 times your growth rate, showing the range of possible outcomes.

Step 5: Expand scenarios. Click "View Projections" under each scenario to see a month-by-month cash flow projection. This detailed view reveals exactly when cash becomes critical and helps identify whether aggressive expense cuts or accelerated fundraising is needed.

• Fundraising timing: The standard advice is to begin fundraising when you have 9–12 months of runway remaining. Fundraising from a position of strength takes 3–6 months on average. Starting too late forces desperate deals at unfavorable terms.
• Hiring decisions: Each new hire increases monthly burn. Use the runway calculator to model how a new hire affects your cash-out date before making an offer, ensuring you have sufficient runway to justify the additional expense.
• Default alive vs. default dead: Paul Graham's "default alive" framework asks whether your startup will reach profitability on current trajectory without raising more money. This calculator answers that question directly — if the base scenario shows "Sustainable," you are default alive.
• Expense reduction triage: When runway is critically short, use the calculator to model the runway impact of specific cost reductions (cutting a headcount, reducing marketing spend, moving offices) to prioritize which cuts provide the most runway extension per dollar saved.
• Revenue milestone planning: Work backward from the cash-out date to determine the revenue milestone required to reach profitability or a fundable position before cash runs out.
• Board reporting: Present runway projections across multiple scenarios to your board or investors to demonstrate financial discipline and awareness of the constraints defining your strategic options.