What startup runway actually means
Runway is the number of months your company can keep going before the bank account hits zero, if your spending and income stay about the same. It is the single most important number for an early-stage founder, because it sets the clock on every other decision: when to hire, when to cut, and when to raise.
The math is simple. Take the cash you have today and divide it by your monthly net burn. If you hold 500,000 and you lose 60,000 a month, you have a little over eight months of runway.
Burn rate: gross versus net
Gross burn is everything you spend in a month. Net burn is what you spend minus what you earn. Net burn is the number that drains your account, so it is the one that decides your runway.
Runway = 500,000 ÷ 60,000 = 8.3 months
If your revenue grows faster than your costs, your net burn shrinks and your runway stretches. If you reach the point where revenue covers expenses, you are cash-flow positive and your runway is, in principle, unlimited.
When to start raising
The mistake that kills good companies is starting a raise too late. A round commonly takes three to six months to close, between building the list, taking meetings, getting to a term sheet, and clearing diligence. If you wait until you have two months of cash, you are negotiating from weakness and investors can smell it.
The working rule most founders use: start raising while you still have about six months of runway left. The calculator marks that date for you, counting back from your zero-cash day.
The part founders underestimate: the pipeline
Raising is a sales funnel. Only a fraction of the investors you contact will take a meeting, and only a fraction of those will write a check. If roughly one in seven to one in ten conversations converts, then closing a round with a dozen checks can mean working a list of fifty to a hundred investors at once, each at a different stage, each needing follow-up.
That is a pipeline, and a spreadsheet falls apart fast under it. Tracking who you have contacted, who is interested, who has gone quiet, and who has committed is the difference between a tight raise and a chaotic one.
Frequently asked questions
What is a healthy amount of runway?
Most founders aim to keep at least twelve months of runway and raise to get back to eighteen to twenty-four months. Under six months is a danger zone where raising becomes urgent.
Does revenue count toward runway?
Yes. Revenue lowers your net burn, which extends your runway. The calculator subtracts your monthly revenue from your expenses to find the real burn.
How much should I raise?
A common approach is to raise enough to fund your target runway at your current burn, plus a buffer for the hiring and growth the round is meant to pay for. The calculator shows the baseline figure to fund your chosen number of months.
Is this financial advice?
No. These are rules of thumb to help you think, not a substitute for advice from an accountant or advisor who knows your specific situation.