Runway

How many months a company can operate before it runs out of cash at current burn. Plain-language explainer with examples. Free to read.

Runway

How many months a company can operate before it runs out of cash at current burn.

What Runway means

Runway = cash on hand / monthly burn. At 12 months of runway you should be raising or already close to it. Below 6 months, you're negotiating from weakness — investors know it and price accordingly.

The right time to start fundraising is when you have 9–12 months of runway. That gives you 3–6 months to run a real process before the situation gets tight.

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•By Alejandro Cremades