Confirm available cash
Exclude restricted funds and amounts already committed to unavoidable payments.
Estimate how many months your startup can operate at its current net burn and see a directional cash-depletion date.
Use unrestricted cash and a normalized monthly net burn rate.
Cash runway translates a cash balance and burn rate into time. It helps founders decide when to raise capital, when to slow hiring, and whether the current plan leaves enough time to reach a meaningful product, revenue, or profitability milestone.
The simple calculation assumes burn remains constant. Real companies have changing payroll, annual software bills, revenue collections, taxes, and financing events, so use this result as a baseline and maintain a monthly cash forecast alongside it.
Available unrestricted cash ÷ average monthly net burnA runway target is most useful when tied to decisions and measurable company progress.
Exclude restricted funds and amounts already committed to unavoidable payments.
Average recent months and incorporate signed hiring or spending commitments.
Begin financing or cost action well before the mathematical zero-cash date.
The right buffer depends on risk and financing conditions. Many teams plan enough time to reach their next milestone plus several months for fundraising or corrective action.
No. Treat financing as cash only after it has closed and funds are available. Build a separate scenario for possible future capital.
Increase cash revenue, reduce or delay expenses, improve collections, renegotiate commitments, or raise capital before the buffer becomes too small.