Startup Runway Formula
The Startup Runway Formula helps entrepreneurs determine how many months their business can operate before running out of cash, based on current funds and expenditure rate. It's a critical metric for strategic planning and fundraising.
Bottom Line
The Startup Runway Formula helps entrepreneurs determine how many months their business can operate before running out of cash, based on current funds and expenditure rate. It's a critical metric for strategic planning and fundraising.
Startup Runway Calculator
Calculate months of runway from cash, burn rate, and revenue growth assumptions.
On This Page
Formula
Copy the exact expression or work through it step by step below.
Runway Months = Cash On Hand / Monthly Burn Variables
RM
Runway Months
The number of months the company can operate before cash runs out at the current burn rate. The single most important survival number for a startup.
COH
Cash On Hand
Total cash currently available, in currency units (bank balance plus committed, accessible funding). The denominator of survival.
MB
Monthly Burn
The average net cash spent per month, in currency units (expenses minus revenue). If the company is cash-flow positive, runway is effectively unlimited.
Step By Step
- 1
Set the baseline case with the real calculator inputs.
Cash On Hand = $150,000, Monthly Burn = $25,000, Monthly Revenue = $5,000, Revenue Growth Pct = 5.00%
- 2
Use net monthly burn (cash out minus cash in), not gross expenses, so the runway reflects revenue already offsetting costs.
Gross spend 60,000 less 20,000 revenue gives a 40,000 net monthly burn.
- 3
Apply the formula and read the first calculator outputs, not just the headline assumption.
The calculator lands with runway months at 8, then dates the cash-out point from today.
- 4
Re-run against a reduced-burn scenario to see how much runway a hiring freeze or cost cut buys before the next funding event.
Cutting net burn from 40,000 to 30,000 extends a 12-month runway to 16 months.
Worked Example
Startup Runway sample case
Cash On Hand
$150,000
Monthly Burn
$25,000
Monthly Revenue
$5,000
Revenue Growth Pct
5.00%
Runway Months = Cash On Hand / Monthly Burn using cash on hand $150,000, monthly burn $25,000, monthly revenue $5,000, revenue growth pct 5.00%.
The calculator lands with runway months at 8, then dates the cash-out point from today. Growing revenue stretches the raw cash-over-burn figure of 7.5 to 8 months.
Common Variations
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Sources & References
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