How do I calculate startup runway?

Runway (months) = Cash balance divided by net monthly burn. Net burn = gross monthly costs (payroll + operating expenses) minus MRR. Example: $500k cash, $80k gross burn, $40k MRR - net burn $40k - 12.5 months runway.

When should a startup begin fundraising?

Start when you have at least 12 months of runway remaining. A full fundraising process takes 3–6+ months to close. Starting when you have 6 months left puts you in a weak negotiating position.

What is the difference between gross burn and net burn?

Gross burn is total monthly spend before revenue. Net burn is gross burn minus MRR - this is what actually reduces your bank balance each month. Investors care about both numbers.

How can I extend my startup runway without raising?

Two levers: reduce burn or grow revenue. On burn: audit subscriptions, delay non-critical hires, renegotiate contractor rates. On revenue: focus on customer expansion (highest ROI), tighten your ICP to close faster.

Free Startup Runway Calculator

Q: What is a good runway for a startup?

18–24 months is the standard benchmark. It gives you time to execute, prove traction, and run a proper fundraising process. Under 12 months is a warning sign. Under 6 months is critical.

Cash Position

Cash in bank total liquid

Operating Costs

Monthly non-payroll costs rent, software, ops

Team

Current headcount

ppl

Avg monthly cost per person inc. tax & benefits

Planning to hire?

Revenue

Current MRR

Monthly MRR growth rate

7.0%

Raise Scenario

Hypothetical additional raise set to 0 to ignore

Expected raise month

Mo 8

Cash runway health

- months

Runway

months of cash

Net Burn / Month

after revenue

Break-even

MRR covers burn

Start Fundraising

allow 6 mo to close

Cash & Revenue Projection

Cash balance MRR (monthly) Gross burn

💰

Cash at 6 months

based on current trajectory

📈

MRR at runway end

projected ARR shown below

🔥

Gross monthly burn

payroll + operating costs

RAISE SCENARIO IMPACT

Set a hypothetical raise in the inputs to see how it extends your runway →

Key Milestones

What is startup runway - and why it matters more than your valuation

Runway is the number of months your startup can survive before it runs out of cash. It's one of the most important numbers any founder can know - yet many don't calculate it until they're already in trouble.

Knowing your runway tells you when to hire, when to fundraise, when to cut costs, and whether your current growth rate will get you to break-even before the money runs out. It's the foundation of any credible financial narrative - whether you're pitching investors, onboarding a CFO, or just making smarter decisions week to week.

The formula

Runway (months) = Cash balance ÷ Net monthly burn. Net burn = gross monthly costs (payroll + operating) minus monthly recurring revenue (MRR). If MRR exceeds costs, you're profitable - net burn is zero or negative, and runway is theoretically infinite.

Why this calculator goes further than a spreadsheet

A static formula gives you one number. This tool runs a live month-by-month projection - so you can see how planned hires, MRR growth rate, and potential funding rounds shift your timeline in real time. Adjust any sidebar input and every metric updates instantly.

Four inputs. Instant clarity.

The calculator is designed to be filled in under two minutes. Here's what each section covers:

Cash position

Your total liquid cash today - bank balance, not including credit lines or undrawn facilities.

Operating costs

Monthly non-payroll spend: software, rent, contractors, marketing, legal. Anything recurring.

Team

Headcount × average fully-loaded monthly cost (salary + tax + benefits). Toggle planned hires to model their impact.

Revenue & growth

Current MRR and your expected monthly growth rate. The projection compounds this month-on-month.

Raise scenario

Optional: model a future funding round to see exactly how it extends your runway and shifts your fundraising timeline.

What the four key metrics actually mean

The dashboard shows four headline numbers. Here's how to interpret them:

Runway

Months of cash remaining

Green = 18+ months (healthy). Amber = 12–18 months (watch it). Red = under 12 months (act now). Under 6 = fundraise or cut immediately.

Net Burn / Month

Monthly cash consumption

After revenue. This is what actually reduces your bank balance. If it's negative, you're cash-flow positive.

Break-even

When MRR covers gross costs

The month your revenue growth outpaces your burn. If this is after your runway ends, you need a plan: a raise, a cut, or faster growth.

Start Fundraising

When to begin your next round

Set to 6 months before runway ends. Fundraising takes time. Starting late is the most common mistake early-stage founders make.

Startup runway - frequently asked

Runway (months) = Cash balance ÷ Net monthly burn rate. Net burn = total monthly costs minus MRR. Example: $500k cash, $80k gross burn, $40k MRR → net burn $40k → 12.5 months runway. The calculator above runs this dynamically with month-by-month projections as your MRR grows.

18–24 months is the benchmark most investors expect. It gives you enough time to execute, prove traction, and run a proper fundraising process - which typically takes 6–9 months end to end. Under 12 months is a warning sign. Under 6 months is critical and requires immediate action.

Start when you have at least 12 months of runway remaining - ideally more. A full fundraising process (deck prep, investor outreach, meetings, term sheet, due diligence, close) takes 3–6+ months. Starting when you have 6 months left puts you in a weak negotiating position, if you can close at all. The calculator's "Start Fundraising" metric flags this date for you automatically.

Gross burn is total monthly spend - payroll, software, rent, everything - before revenue. Net burn is gross burn minus MRR. Investors want to know both: gross burn reveals your cost structure; net burn shows how fast you're consuming cash. The calculator shows both in the insights panel.

Two levers: reduce burn or grow revenue. On burn: audit software subscriptions, delay non-critical hires, renegotiate contractor rates, cut anything not directly tied to revenue generation. On revenue: prioritise customer expansion (highest ROI), tighten your ICP so you close deals faster, and consider shorter pilot contracts to accelerate cash in. Use the hire toggle in the calculator to model exactly how much each hire adds to your monthly burn.

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