Cash runway

Q: What is a healthy cash runway?

Less than 6 months is danger territory and demands immediate action. Six to 12 months means you should be raising or cutting burn soon. Twelve to 18 months is comfortable, and 18 to 24 months or more is the healthy position you want right after a fundraise, since raising the next round typically takes several months of lead time.

Q: How do you calculate cash runway?

Divide the cash in your bank account by your monthly net burn, which is how much more cash you spend than you bring in each month. For example, 3 million euros of cash divided by 150,000 euros of monthly net burn gives 20 months of runway.

Q: What is the difference between gross and net burn?

Gross burn is your total monthly cash spend. Net burn subtracts the revenue you collect, so it is the amount your cash balance actually falls each month. Runway should be calculated on net burn, because incoming revenue genuinely extends how long your cash lasts.

How many months your company can keep operating before the cash runs out — the single number that sets the clock on every decision a startup makes.

In plain English

Runway is how long you can survive on the cash you have. Take the money in the bank, divide it by how much you lose each month, and you get the number of months before you hit zero. It's the most consequential number a startup tracks, because it sets the deadline for everything: when you need to raise, when you need to cut, when you need to reach profitability. A long runway buys you time and leverage — you can negotiate a fundraise from strength rather than desperation. A short one shrinks every option and forces fast, painful choices. Runway is the clock, and burn rate is how fast it ticks.

The formula

Runway (months) = cash in the bank ÷ monthly net burn

Use net burn — total spend minus the revenue you collect — because incoming revenue genuinely extends how long your cash lasts; if you're cash-flow positive, your runway is effectively infinite.

A worked example

You have €3,000,000 in the bank, and each month you spend €150,000 more than you bring in (your net burn).

Runway = €3,000,000 ÷ €150,000 = 20 months

Twenty months is a comfortable position — enough to invest in growth while leaving a sensible buffer to start the next fundraise long before the cash gets tight.

What's a good cash runway?

The rough guide most founders and investors use:

Runway	Verdict	What to do
< 6 months	Danger	Act now — cut burn or raise
6–12 months	Raise soon	Start the fundraise process
12–18 months	Comfortable	Plan ahead, watch burn
18–24+ months	Healthy	Typical post-raise position

Because fundraising itself takes several months, you want to begin well before runway gets short — and watch your burn multiple to be sure each euro of burn is actually buying growth.

Frequently asked questions

What is a healthy cash runway?

Less than 6 months is danger territory and demands immediate action. Six to 12 months means you should be raising or cutting burn soon. Twelve to 18 months is comfortable, and 18 to 24 months or more is the healthy position you want right after a fundraise, since raising the next round typically takes several months of lead time.

How do you calculate cash runway?

Divide the cash in your bank account by your monthly net burn, which is how much more cash you spend than you bring in each month. For example, €3 million of cash divided by €150,000 of monthly net burn gives 20 months of runway.

What is the difference between gross and net burn?

Gross burn is your total monthly cash spend. Net burn subtracts the revenue you collect, so it is the amount your cash balance actually falls each month. Runway should be calculated on net burn, because incoming revenue genuinely extends how long your cash lasts.

Burn multiple · Rule of 40 · SaaS magic number

Learn more

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