Startup runway formula (simple + realistic)

In its simplest form, runway answers one question: “How long can we keep going with the cash we have?” The most common quick calculation is:

• Net Burn (per month) = Monthly Expenses − Monthly Revenue
• Runway (months) = Cash on Hand ÷ Net Burn (only when Net Burn > 0)

Example: If you have $75,000 in the bank, your monthly expenses are $18,000, and revenue is $12,000, then net burn is $6,000/month. Your runway is $75,000 ÷ $6,000 = 12.5 months.

Real life is messier: revenue can grow, expenses can creep up, and sometimes you raise money (or land a contract) at a particular month. That’s why this calculator also supports a simple monthly simulation:

• Each month your cash changes by (revenue − expenses).
• If you add a revenue growth rate, revenue increases each month by that percent.
• If you add an expense growth rate, expenses increase each month by that percent.
• If you enter a funding injection month, cash increases by that amount at that month.

• Runway months: your estimated time until cash hits $0.
• Runway end date: runway months converted into a calendar date from today.
• Burn rate: the “speed” at which you’re spending cash (net burn).
• Breakeven month: the first month where revenue ≥ expenses (if it happens).

• It’s a simple, punchy number people understand: “We have 7 months.”
• It turns abstract finance into a clear deadline — great for accountability.
• It’s highly “compare-able” across friends and founder communities.
• It creates a natural conversation hook: “How did you increase runway?”

Runway scenarios founders actually run

Here are a few realistic examples you can test inside the calculator. These are not recommendations — they’re just common patterns.

• Cash: $60,000
• Revenue: $6,000/month
• Expenses: $14,000/month
• Net burn: $8,000/month
• Runway: 7.5 months

• Cash: $60,000
• Revenue: $6,000/month, Growth: 12%/month
• Expenses: $14,000/month, Growth: 2%/month
• Result: runway might extend because revenue catches up faster.

• Cash: $40,000
• Revenue: $10,000/month
• Expenses: $18,000/month
• Funding: $100,000 arriving in month 3
• Result: you “bridge” the runway if the funding arrives before cash hits zero.

If you’re using this for planning, try three runs: a “best case” (higher revenue growth, lower expense growth), a base case, and a worst case. The spread between them helps you see what you’re really betting on.

What the calculator does behind the scenes

This calculator runs two layers of logic:

• Instant runway: It computes your net burn as expenses minus revenue. If the result is positive, it divides your cash by net burn to estimate runway in months. If net burn is zero or negative, you’re cash-flow positive and runway is shown as “not limited by burn.”
• Monthly simulation: If you provide growth rates or funding, the calculator simulates each month: it adjusts cash by (revenue − expenses), then updates revenue and expenses by their growth rates. If a funding month is specified, it adds that cash in the chosen month.

The simulation stops when cash drops below $0 (meaning you ran out sometime during that month), or when it reaches the maximum simulated horizon (20 years). If your business becomes cash-flow positive, the simulator keeps going and will label runway as “Sustainable (cash-flow positive)” if cash never hits zero.

• If your runway is under 6 months, it’s usually “move now” territory.
• If your runway is 6–12 months, you have time — but not time to waste.
• If your runway is 12+ months, you can think strategically (but still track weekly).

Frequently Asked Questions

• What’s the difference between burn rate and runway?

  Burn rate is how much cash you lose each month (usually net burn = expenses minus revenue). Runway translates that burn into time: how many months you can keep operating with your current cash.

• Should I use gross burn or net burn?

  Founders often track both. Gross burn is total monthly expenses (useful for understanding spend), while net burn subtracts revenue (useful for predicting runway). This calculator uses net burn to estimate runway.

• What if my revenue is higher than expenses?

  Then you’re cash-flow positive (net burn ≤ 0). In that case you don’t have a “run out” runway problem — your constraint is usually growth, hiring, or market risk. The calculator will show “Sustainable” if cash doesn’t hit zero in the simulation.

• How should I choose a revenue growth rate?

  Use what your current traction supports. If you’re early, you might use a conservative base case like 2–5% monthly, and a best case like 8–15% monthly. Most importantly: update the assumption monthly based on actuals.

• Does funding guarantee runway?

  No. Funding can extend runway, but only if it arrives before cash hits zero and if your burn doesn’t rise faster than expected. Use the funding month field to test whether a planned raise actually bridges you.