What is Runway?

Runway is the number of months a business — usually a startup — can continue operating at its current burn rate before it runs out of cash.

Runway is the single most important number on the wall of a venture-backed company. Below ~12 months, founders should already be fundraising; below ~6 months, options narrow rapidly.

Lengthening runway means either raising capital (equity, venture debt) or cutting burn (layoffs, paused projects, renegotiated contracts). The best runway extension is profitable growth — every franc of revenue both extends runway and de-risks the business.

Formula

Runway (months) = Cash on Hand ÷ Monthly Net Burn

Example

A startup holds CHF 3m in cash and burns CHF 250k per month — runway is 12 months, the point at which fundraising or break-even must be achieved.

Related terms

Burn Rate

Burn rate is the speed at which a company — typically an unprofitable startup — spends its cash reserves each month, measuring the pace of cash consumption.

Cash Flow

Cash flow is the net amount of cash moving into and out of a business during a period, measuring the actual liquidity created or consumed rather than accounting profit.

Operating Expenses (OpEx)

Operating expenses are the ongoing costs a business incurs to run its day-to-day operations — including salaries, rent, utilities, marketing and software — expensed in the period they occur.

Free Cash Flow

Free cash flow (FCF) is the cash a business generates from operations after deducting the capital expenditures needed to maintain or expand its asset base — the cash truly available to shareholders, lenders and reinvestment.

Frequently asked questions

How much runway should I have?+

Investors expect 18–24 months after a fundraise; below 12 months, fundraising effort dominates the founders' calendar.

Can I extend runway without raising?+

Yes — cut burn, accelerate revenue, or take venture debt against existing equity.

Does runway include future revenue?+

Typically calculated on current net burn; conservative founders assume flat revenue.