How does the Startup Runway Calculator work?
Net burn = expenses − revenue. Runway = cash ÷ net burn. If revenue exceeds expenses, your runway is unlimited.
Background & details
How to read the result
Runway tells you how many months you can keep operating before the cash runs out. Twelve months is comfortable; six months is the threshold at which you should act – start fundraising, push revenue up or cut costs. Below three months the situation is critical and should be your top priority.
Gross burn vs. net burn
Gross burn is your total monthly spend. Net burn subtracts revenue and is the number that really matters – only the real shortfall eats into your cash. As revenue grows, net burn falls automatically and your runway extends without you cutting anything.
Common mistakes
- Over-optimistic projected revenue: Be conservative. A runway built on hoped-for sales disappears faster than expected.
- Forgetting one-off costs: Tax bills, annual licences or hardware aren't smooth monthly costs but still drain cash.
- Ignoring growth: If you hire or scale, next month's burn is higher – a static runway then creates a false sense of security.
Practical tips
Recalculate runway every month, because it is a snapshot. Plan your funding round so you start it with at least six months left – conversations, due diligence and paperwork often take three to six months. Model two scenarios: a "default alive" case where revenue growth alone makes you profitable, and a lean case showing how far cost cuts could stretch the runway.
When (not) to use it
The runway calculator is ideal for startups and young companies that are still loss-making and need to watch their cash. For an already profitable business with positive cash flow it says little. And the question of the sales volume at which you become profitable in the first place is answered not by runway but by the break-even calculator.