Runway Calculator

What This Calculator Does

Your startup has $500,000 in the bank. You spend $40,000 a month. How long before you run out of money? That question keeps founders awake at night, and the answer is your runway.

Runway is the number of months your business can continue operating before its cash balance reaches zero. It is calculated by dividing your current cash by your net monthly burn rate (monthly expenses minus monthly revenue). This calculator projects your cash balance month by month, accounting for revenue growth, so you can see exactly when you need to raise your next round or reach profitability.

According to a CB Insights analysis of startup failure, running out of cash is the second most common reason startups fail, cited in 38% of post-mortems. Knowing your runway with precision is not a luxury. It is survival.

Inputs Required

• Current Cash Balance: The total cash and cash equivalents your business has available right now
• Monthly Expenses (Gross Burn): Total monthly operating costs including salaries, rent, software, and other overhead
• Monthly Revenue: Recurring revenue your business generates each month
• Annual Revenue Growth Rate: How fast you expect revenue to grow, which extends your runway over time

Outputs Provided

• Cash Runway: Number of months until your cash balance hits zero
• Gross Monthly Burn: Your total monthly spending before accounting for revenue
• Net Monthly Burn: How much cash you actually lose each month after revenue
• Cash Balance Chart: Month-by-month projection of your declining (or growing) cash position

How the Calculation Works

The basic formula is straightforward. Divide your current cash by your net monthly burn rate to get your runway in months.

For example, if you have $500,000 in cash and your net burn is $30,000 per month ($40,000 expenses minus $10,000 revenue), your runway is approximately 16.7 months. The calculator also models revenue growth. If your revenue grows at 5% annually, each month your revenue gets slightly larger, which slows your net burn and extends your runway beyond the simple division.

The chart projects this dynamically. Each month, it subtracts your gross burn and adds that month's revenue (grown from the starting value using your growth rate) from your cash balance. The runway ends when the balance crosses zero.

How to Use the Calculator

1. Enter your current cash balance from your most recent bank statement
2. Input your total monthly expenses, including all salaries, rent, software subscriptions, and variable costs
3. Enter your current monthly recurring revenue (or zero if you are pre-revenue)
4. Set your expected annual revenue growth rate based on your sales pipeline and historical trends
5. Review your runway in months and the cash balance chart to see your trajectory

If you are pre-revenue, set monthly revenue to $0. The calculator will show your runway based purely on your gross burn rate. For a more complete picture of your business finances, pair this with our Budget Calculator to break down your expenses in detail.

Example Calculations

Example 1: The Seed-Stage SaaS Startup

Maya just raised a $1.2 million seed round for her B2B SaaS startup. She has $1,150,000 in the bank after legal fees. Her monthly expenses are $55,000 (three engineers, a designer, office space, and cloud infrastructure). She has $8,000 in monthly recurring revenue from early customers, growing at 8% annually.

• Net monthly burn: $47,000
• Runway without revenue growth: approximately 24.5 months
• Runway with 8% annual revenue growth: approximately 27 months
• The revenue growth buys her about 2.5 extra months compared to a flat projection

Maya should start fundraising around month 18 to give herself 6 months of buffer. Most investors recommend beginning the next raise when you have 6 to 9 months of runway remaining.

Example 2: The Pre-Revenue Hardware Startup

James is building a hardware startup and has $300,000 from an angel round. His monthly burn is $25,000 (mostly contract manufacturing deposits and his own modest salary). He has no revenue yet and expects $0 for the first 12 months while he completes the prototype.

• Net monthly burn: $25,000 (equal to gross burn since revenue is $0)
• Runway: exactly 12 months
• He needs to either raise more capital or start generating revenue by month 8 to avoid cutting it close

Real World Scenarios

The Hiring Decision

A founder with 14 months of runway is considering hiring a senior engineer at $15,000 per month. That single hire would increase monthly burn from $30,000 to $45,000, cutting runway from 14 months to roughly 9.3 months. The calculator lets you model this instantly: adjust the monthly expenses slider and watch the runway number respond. If 9 months is not enough time to reach the revenue milestone that would justify the hire, the answer is clear.

The Revenue Ramp Scenario

A startup has $800,000 in cash, burns $50,000 monthly, and generates $15,000 in revenue growing at 15% per year. Without modeling growth, the simple calculation gives 22.9 months of runway. But with 15% annual revenue growth, the revenue in month 12 is roughly $17,250, and by month 18 it is near $18,500. This extends the actual runway to about 26 months. The growth rate matters more than most founders realize, especially for companies with meaningful revenue traction.

The Bridge Round Timing

If your runway drops below 6 months, you are in the danger zone. Investors know that desperate founders accept worse terms. Run the calculator with your current numbers and identify the month where cash falls below the 6-month threshold. Start your fundraise at least 3 months before that point. If your runway is 12 months, you should be having investor conversations by month 6 at the latest.

Common Mistakes to Avoid

• Confusing gross and net burn: Gross burn is your total monthly spend. Net burn is spend minus revenue. Investors care about net burn because it reflects how much cash you are actually losing each month. Always know both numbers.
• Forgetting one-time expenses: Annual insurance premiums, legal fees, equipment purchases, and security deposits do not show up in a typical monthly burn calculation. Add a buffer of 10 to 15% to your monthly burn to account for these irregular costs.
• Overestimating revenue growth: Founders are optimistic by nature. Use a conservative growth rate in your base case and a separate optimistic case. If your base case shows less than 9 months of runway, you need to cut costs or raise capital.
• Not recalculating monthly: Runway is a moving target. Your burn changes as you hire, and your revenue changes as you grow. Recalculate every month with actual numbers, not projections.

Limitations of This Calculator

This tool provides an estimate based on constant burn and smooth revenue growth. Real businesses have lumpy expenses (annual renewals, performance bonuses) and unpredictable revenue (deals that close late, churn). The calculator does not account for accounts receivable timing, tax payments, or one-time capital expenditures. It also assumes revenue grows continuously, which is rarely how it works in practice. Use this as a planning tool, not a forecast. For detailed financial modeling, work with a CFO or financial advisor.

Authoritative Research and Resources

• CB Insights: Top Reasons Startups Fail - Analysis of 101 startup post-mortems identifying running out of cash as the second most common failure cause, cited in 38% of cases.
• Burn Rate Guide - A detailed explanation of gross vs. net burn rate, how investors evaluate burn, and benchmarks by startup stage.

For planning your overall business finances, try our Budget Calculator or ROI Calculator to evaluate investment decisions. If you are managing personal savings while building a startup, our Savings Calculator can help plan your personal runway.