Glossary · Fundraising
Runway
Runway is the number of months a startup can operate before it runs out of cash at its current burn rate.
Runway is the number of months a startup can operate before it runs out of cash at its current burn rate.
Definition
Formula
Runway (months) = Cash on Hand ÷ Net Monthly Burn
Worked example
$600k in bank ÷ $50k/mo net burn = 12 months of runway. Start raising the Series A by month 6.
Common mistakes
- — Assuming next month's burn matches this month's — hiring, ad tests, and one-time costs compound.
- — Waiting until the last 3 months to fundraise.
Frequently asked questions
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