What is Runway?

Runway is the number of months your company can survive on the money it has in the bank, given how fast it's spending. If you have $120,000 and spend $20,000 a month more than you earn, you have six months of runway.

Runway is the most important survival number a founder tracks. When it hits zero, the company stops — regardless of how good the product or the team is. Knowing your runway tells you how much time you have to hit your next milestone or raise more money.

How to calculate runway

Divide your current cash by your net monthly burn rate (the amount you lose each month after subtracting revenue from expenses). $300,000 in the bank with a $25,000 monthly burn equals 12 months of runway.

If you're already profitable, your runway is effectively infinite — you're adding cash, not losing it. Most early startups aren't there yet, so they manage runway carefully.

• Runway = cash on hand ÷ net monthly burn.
• Rising revenue extends runway; rising costs shorten it.
• Most founders aim to raise or reach profitability with at least 3–6 months to spare.

Why runway matters for validation

Runway turns your idea into a deadline. It tells you exactly how many months you have to prove the business works before you must raise money or become profitable. Planning your validation experiments around your runway keeps you from running out of cash mid-test — the most avoidable way startups die.