Business
Startup Runway Calculator
Calculate how many months of cash your business has left
FAQs
What is startup runway?
Runway is the number of months a business can continue to operate before it runs out of money, assuming revenue and expenses stay constant.
What is burn rate?
Burn rate is the amount of money your company is losing each month. It is calculated as Monthly Expenses minus Monthly Revenue.
What is "Default Alive"?
A startup is "Default Alive" if it is already profitable or will reach profitability before running out of its current cash reserves.
How to Use the Startup Runway Calculator
Transparency on your cash position is vital for startup survival. This calculator helps you see how much 'time' you have left to reach profitability or raise another round of funding.
- Enter your current 'Cash on Hand' (liquid bank balance).
- Input your average 'Monthly Revenue' (MRR or total receipts).
- Enter your total 'Monthly Expenses' (all operating costs including salaries).
- Review your monthly burn rate and total months of runway remaining.
The Math of Burning Cash
Runway calculation is the most critical metric for any venture-backed or bootstrapped company.
Monthly Burn Rate
This represents how much money your company 'burns' or loses every month. If revenue is higher than expenses, your burn rate is zero.
Example:
Input: $15,000 expenses, $5,000 revenue
Calculation: 15,000 - 5,000
Result: $10,000 monthly burn
Runway (Months)
Calculates exactly how many months you can continue operating at current levels before your bank balance hits zero.
Example:
Input: $100,000 cash, $10,000 burn
Calculation: 100,000 ÷ 10,000
Result: 10 months
Strategic Runway Planning
Use this data to make critical decisions for your startup.
Fundraising Calibration
Start your next fundraising round when you still have 6-9 months of runway. Never wait until the last minute.
Hiring Decisions
Before hiring a new employee, see how their salary will impact your burn rate and reduce your total runway.
Pivot vs. Persevere
If runway is getting short and growth is stalled, use this calculation to decide if a shift in strategy is needed.
Startup Survival Tips
Tips
- Always keep a 'buffer' of at least 3 months for unexpected expenses or market downturns.
- Monthly burn can fluctuate; use a 3-month average for a more realistic estimate.
- Focus on 'Gross Margin'—know how much it actually costs you to deliver your product before fixed costs.
- Reducing fixed costs (like expensive office space) is the fastest way to extend runway.
- Revenue is the best fuel; focusing on sales preserves runway more effectively than cutting costs alone.
Common Mistakes to Avoid
- Underestimating 'hidden' costs like taxes, insurance, and annual software renewals.
- Excluding the founder's own salary from the expense calculation.
- Being overly optimistic about revenue growth projections while burn remains high.