Startup Runway Calculator

Startup runway measures how many months a company can continue operating before running out of cash. It is one of the most critical metrics any founder must monitor.

The core formulas:

Monthly Burn Rate = Total Monthly Expenses − Monthly Revenue

Runway (months) = Current Cash Balance / Monthly Burn Rate

Zero Date = Today + Runway in Months

What each variable means:

• Gross burn is everything going out in a month, before any revenue.
• Net burn is gross burn minus revenue, and it is the figure that actually sets your runway. A company spending $85,000 and earning $22,000 is burning $63,000, not $85,000.
• Cash balance means liquid cash and equivalents available right now. Not committed lines of credit, not receivables you hope to collect.
• Runway answers “how long until we need more funding or more revenue?”
• Zero date is the calendar date the cash runs out if nothing changes.

Worked example: A SaaS startup has $420,000 in the bank. Monthly expenses: $85,000 (salaries, servers, marketing). Monthly recurring revenue: $22,000.

Net burn = $85,000 − $22,000 = $63,000/month Runway = $420,000 / $63,000 = 6.7 months of runway

Note that 6.7 months is not “about seven months”. It is roughly 203 days, which lands three weeks short of the seven-month mark, and three weeks matters a great deal when you are negotiating a term sheet. The calculator gives you the actual date rather than a rounded month count.

Rule of thumb benchmarks:

Investors expect founders to open their next round with about 6 months of runway left, because raising typically takes 3 to 6 months from first meeting to money in the bank. Leave it later and you negotiate from a position everyone in the room can see. The fastest levers on burn are deferring non-essential hires and renegotiating vendor contracts, and both take a month or two to show up in the bank balance, so start them before you hit the danger band rather than after.

A caution on the straight line. This calculation assumes burn stays flat, and it rarely does. Headcount grows, annual software renewals land in one month, and revenue that looked linear turns seasonal. Re-run it whenever your monthly numbers move by more than about 10%.