Runway
What is Runway?
Runway is the number of months a company can keep operating before running out of cash, given its current cash balance and net burn rate.
Also known as: Cash Runway, Startup Runway
Runway Formula
Runway (months) = Cash Balance / Monthly Net Burn | Variable | Meaning |
|---|---|
Cash Balance | Cash and cash equivalents currently in the bank. |
Monthly Net Burn | Cash spent per month net of cash collected. |
How to Calculate Runway
Worked example
- Cash Balance
- $1,200,000
- Monthly Net Burn
- $100,000
- → Runway (months)
- 12
Runway Calculator
Runway (months) = Cash Balance / Monthly Net Burn | Variable | Meaning |
|---|---|
Cash Balance | Cash and cash equivalents currently in the bank. |
Monthly Net Burn | Cash spent per month net of cash collected. |
Worked example
- Cash Balance
- $1,200,000
- Monthly Net Burn
- $100,000
- → Runway (months)
- 12
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Prefer a dedicated page? Use the Runway calculator.
Runway Benchmarks
| Segment | Level | Benchmark |
|---|---|---|
| general | good | 12–18 months |
| general | target | 18–24 months |
Common Mistakes with Runway
- Using gross burn instead of net burn: runway should be based on cash out minus cash in — ignoring collections makes runway look shorter than it is.
- Assuming burn stays flat: hiring plans and churn change net burn, so recompute runway on a rolling basis rather than treating it as fixed.
Runway FAQ
What is runway?
Runway is how many months of operation a company has left at its current net burn rate before cash runs out. $1.2M in the bank at $100K monthly net burn is 12 months of runway.
How do you calculate runway?
Runway (months) = Cash Balance / Monthly Net Burn. Use net burn — cash out minus cash collected — not gross spend.
How much runway should a SaaS startup have?
A common target is 18–24 months after a fundraise, giving enough time to hit the next milestone and raise again before dropping below 6 months of cash.
More questions? See the full Runway FAQ.