Runway

Runway is how many months a company can operate before it runs out of cash. It depends on two numbers: the cash you have and your monthly burn rate.

How runway is calculated

Divide cash on hand by net monthly burn.

A company has $720,000 in the bank and burns $60,000 net per month. Its runway is 12 months. If growing MRR cut net burn to $40,000, the same cash would last 18 months. More revenue extends runway the same way raising money does.

Why it matters

• Runway is your deadline to reach a milestone, raise a round, or become profitable.
• With short runway, teams focus on survival and revenue. With long runway, they can invest in growth.
• Most founders aim to start raising with 6 to 12 months of runway left, before a short deadline weakens their position.

Extending runway

You can raise more cash, spend less, or grow revenue. Growing revenue is the best option because it lowers net burn without cuts. Efficient CAC and strong retention make each dollar of spend go further. The Rule of 40 helps you judge whether your growth justifies your burn.