Runway (Startups)
Short answer
Runway is how many months a business can operate at current burn before cash runs out. For pre-profitable startups, runway is the survival metric — the widely-cited rule of thumb is to keep it above 18 months so fundraising, hiring, and product decisions aren't compromised by short-term cash pressure.
Formula
Runway (months) = Cash on Hand / Monthly Net Burn
Take your current cash balance. Divide by your average monthly net cash burn (operating outflows minus operating inflows).
Why it matters
Runway is the single most important survival metric for any pre-profitable startup. The industry rule of thumb is to always have ≥ 18 months of runway — enough time to either become profitable, raise, or pivot before the lights go out.
Benchmarks
People also ask
Common questions about Runway (Startups)
What is Runway (Startups)?+
Runway is how many months until your cash runs out at the current burn rate.
How is Runway (Startups) calculated?+
Take your current cash balance. Divide by your average monthly net cash burn (operating outflows minus operating inflows).
What is a good Runway (Startups)?+
A healthy runway (startups) is typically around ≥ 24 months — comfortable. Specific targets vary by industry and stage; check our benchmarks above for your sector.
Why does Runway (Startups) matter?+
Runway is the single most important survival metric for any pre-profitable startup. The industry rule of thumb is to always have ≥ 18 months of runway — enough time to either become profitable, raise, or pivot before the lights go out..
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Related concepts
Where this matters most
See Runway (Startups) in the context of saas & software.
Industry-specific benchmarks, common pitfalls, and what lenders look for in this sector.