Runway

Runway is how long a company can keep operating before it runs out of cash — usually expressed in months. It's the direct output of two numbers: how much cash you have and how fast you're spending it. Runway turns burn rate into a countdown, which is why founders and boards watch it above almost anything else.

How runway is calculated

Divide current cash reserves by monthly net burn.

For example, a company holds $720,000 in the bank and burns $60,000 net per month. Runway = $720,000 ÷ $60,000 = 12 months. If growing MRR cut net burn to $40,000, the same cash would stretch to 18 months — showing how revenue growth buys time as directly as raising more does.

Why it matters

• It's a deadline — runway tells you how long you have to hit a milestone, raise a round, or reach profitability.
• It shapes strategy — teams with short runway prioritize survival and revenue; those with long runway can invest in growth.
• It's a fundraising signal — most companies aim to raise with 6–12 months of runway left, before urgency weakens their position.

Extending runway

There are only three levers: raise more cash, spend less, or grow revenue. The last is the healthiest, because rising recurring revenue lowers net burn without cutting into the business. Efficient CAC and strong retention make each dollar of spend go further, and the Rule of 40 frames whether your growth justifies the burn eating your runway.