What Is Cash Runway?
Cash runway is the number of months a startup can keep operating before its cash balance reaches zero, given its current rate of net cash burn. It is one of the most closely watched metrics by founders, operators, and investors because it answers a single, urgent question: how much time is left to reach profitability or raise the next round.
Runway is directly tied to net monthly burn — the amount of cash a company spends beyond what it brings in from revenue each month. A company with high revenue relative to expenses burns less cash and has longer runway; a pre-revenue or early-stage company typically burns closer to its full expense total each month.
What Is a "Healthy" Runway?
Investors and operators commonly group runway into rough health tiers. These are widely-cited industry rules of thumb, not a hard rule for every company or stage:
| Runway Range |
Status |
What It Means |
| < 6 months |
Critical |
Immediate action needed — cut burn, raise funding, or grow revenue fast. Most investors expect active fundraising to already be underway well before this point. |
| 6 – 12 months |
Concerning |
Time to start a fundraise process now if one isn't already running — a typical raise takes several months from first pitch to closed cash in the bank. |
| 12 – 18 months |
Healthy |
The commonly-cited standard target range for an operating startup — enough time to hit meaningful milestones between raises. |
| 18+ months |
Strong |
Substantial buffer. Gives real negotiating leverage in a future raise and room to weather a slow quarter without panic. |
Default Alive or Default Dead?
Investor and Y Combinator co-founder Paul Graham popularised this distinction in a 2015 essay. A startup is default alive if, on its current revenue growth and spending, it would reach profitability before the money runs out — and default dead if it would not.
The pill beside your runway result reflects exactly that: enter a monthly MRR growth rate and this calculator projects month by month whether growing revenue overtakes your expenses before the cash hits zero. With growth left at 0%, a company that is burning cash is default dead by definition — nothing in the projection ever closes the gap. That is not a judgement on the business; it simply means the current trajectory alone does not get you to profitability, so a raise, a cut, or faster growth has to.
Assumptions & Scope Notes
This calculator uses standard flat or growth-adjusted burn projections:
- Flat Burn (default): Assumes this month's net burn rate holds steady every month until cash runs out.
- Growth-Adjusted Projection (optional): If a monthly MRR growth rate is entered, burn is recalculated month-by-month as MRR compounds, giving a more realistic — though still simplified — projection.
- Out of Scope: One-time cash events (a funding round, a large one-time expense), seasonal revenue swings, and expense growth are not modeled. For detailed planning, pair this with a full financial model.