Definition
The number of months a company can continue operating at its current burn rate before running out of cash.
Formula
Cash on hand / Monthly burn rate
How to measure
Divide the current cash balance by the average monthly burn rate over the last three months for a stable estimate.
Why track it
Runway is the most urgent planning number for an early-stage company, defining the deadline for reaching breakeven or closing a next round.
Example
A company with $480,000 in the bank and a $80,000 monthly burn rate has six months of runway.
FAQ
- What is Runway?
- The number of months a company can continue operating at its current burn rate before running out of cash.
- How do you calculate Runway?
- Cash on hand / Monthly burn rate
- Why track Runway?
- Runway is the most urgent planning number for an early-stage company, defining the deadline for reaching breakeven or closing a next round.