Runway calculator

By Isidore Mikorey-Nilsson · June 26, 2026

The formula

Runway = cash available divided by net monthly burn. If your revenue covers your expenses, your burn is zero and your runway becomes unlimited.

A concrete example

$80,000 in cash and a net burn of $10,000 a month: your runway is 8 months. If you sign new customers that bring your burn down to $6,000, the same cash now carries you more than 13 months. Runway is never fixed: it moves with every dollar you collect or spend.

How to read your runway

Below 6 months, you are in the danger zone: cash becomes the priority, not growth. Between 6 and 12 months, you have room to execute but need to keep an eye on the trajectory. Beyond 12 to 18 months, you can invest and take bets without gambling your survival every month end.

What eats into your runway

• Burn that climbs too fast. Hiring or spending ahead of traction shortens the countdown.
• Forgotten annual expenses. One large one-off charge can break a runway that looked comfortable if you never smoothed it out.
• Acquisition with a long payback. Every new customer costs cash before it returns any, which widens your burn in the short term.
• Late payments. Runway is measured in real cash sitting in your account, not in revenue you have invoiced.

How to extend it

• Increase your cash inflows: upfront annual payment, fewer late payments.
• Cut spending that serves neither the product nor acquisition.
• Prioritize the channel with the shortest payback so acquisition weighs less on cash.
• Move closer to break-even: at zero net burn, your runway becomes unlimited.

The number that kills the most startups

Runway is not an accountant's metric, it is a survival countdown. When CB Insights studies why startups die, running out of cash sits right at the top of the list. The important nuance: it is almost always the final cause, rarely the root cause. You run out of cash because the product never found its market, because the model does not hold up, or because you spent ahead of traction. Runway simply puts a date on those problems.

That is why knowing it, down to the dollar and the month, is not optional. A founder who ignores their runway is steering blind: they do not know how much time they have left to prove their model, nor when they need to change course. Calculating it regularly turns a vague anxiety into a clear decision.

Runway you endure or runway you steer

There are two ways to live with your runway. Endure it: watch the balance shrink and hope it works out. Steer it: turn it into the input for a decision. How many months do I have left? What do I need to have proven before that date, to raise, reach break-even, or justify continuing? Runway should always be read against a dated goal, never in a vacuum.

Concretely, if you have eight months of runway, the real question is not "how do I survive eight months" but "what needs to be true in six months so I am not against the wall." That shift changes everything: it makes you cut spending that does not move you toward that milestone, and protect what does. Runway becomes a prioritization tool, not just a source of stress.

Paul Graham's "default alive" test

Paul Graham proposes a simple question to ask yourself early, in his essay Default Alive or Default Dead : at your current growth rate, without raising another dollar, do you reach break-even before you run out of cash? If yes, you are "default alive," you stand on your own. If no, you are "default dead," you are counting on a future raise to survive, often without realizing it.

Asking this question early, rather than once cash gets critical, changes the decisions you make. A "default dead" founder who ignores it keeps hiring and spending as if the raise were already secured. The same founder, aware of it, adjusts their burn while they still have time. Your runway and your revenue trajectory, together, tell you which side you are on today.

The three levers to buy back months

Extending your runway comes down to three levers, in this order of effectiveness. The first, often the fastest: your cash inflows. Moving customers to upfront annual payment, cutting payment delays, chasing unpaid invoices, that is cash coming in without changing anything about your product or your spending. On a young SaaS, a handful of signed annual subscriptions can add several months of runway at once.

The second lever is your burn. Cut what serves neither the product nor acquisition: the tools you do not use, the comfort spending, the bets launched too early. Be careful not to cut into what brings you customers, or you gain runway while losing the traction that justified it. The third lever is the most structural: moving closer to break-even. At zero net burn, your runway becomes infinite, and you move from survival to the freedom to choose your own pace.

These three levers are not mutually exclusive. The right reflex when runway gets tight is to pull all three at once: speed up cash inflows, cut the superfluous, and focus acquisition on the channel with the shortest payback. You are not trying to survive as long as possible out of fear, you are trying to buy yourself the time to reach your next milestone while keeping your hands free.

Frequently asked questions

What minimum runway should you aim for?

A common target is 12 to 18 months of runway, enough time to execute and raise your next round calmly before you run out of cash.

What is net burn?

Net burn is the cash you consume every month: your expenses minus your revenue. If it is zero or negative, you are at break-even.

How do you calculate net burn?

Take your cash outflows for the month (salaries, tools, infrastructure, marketing) and subtract your real cash inflows. The balance is your net burn. Watch out for annual expenses like insurance or subscriptions: spread them over twelve months so you do not underestimate your burn.

What runway do you need to raise funding?

You want enough runway left to negotiate without your back against the wall. Starting a raise with three months of cash means negotiating from a position of weakness. Aim for six to nine months of margin when you open the process.