Runway is how many months your company can keep going before the money runs out. The short answer to "how much do I need?" is enough to reach your next milestone, plus the time it takes to fix things if you miss it. For most startups that works out to 12 to 18 months after raising, and never less than 6.
The rest of this guide is how to work out your own number instead of borrowing someone else's.
How to calculate your runway
Runway is cash divided by net burn:
- Net burn = monthly expenses − monthly revenue
- Runway = cash in the bank ÷ net burn
If you have $180,000 in the bank, spend $25,000 a month and bring in $10,000, your net burn is $15,000 and your runway is 12 months.
Two things make the simple number misleading. Revenue that's growing makes your real runway longer than the formula says. Costs you've already committed to (a hire starting next month, an annual contract renewing) make it shorter. Always run the number with the costs you know are coming, not just the ones on last month's statement.
How much runway you need, by stage
| Stage | Typical target | Why |
|---|---|---|
| Pre-revenue, bootstrapped | 9–12 months of personal and company costs | Long enough to build, launch and get real signal |
| Early revenue, bootstrapped | 6+ months, growing toward profitable | Each month of growth shortens the gap |
| Just raised a seed round | 18–24 months | Time to hit the next round's milestones with slack |
| Raising in the next year | 12+ months when you start | Fundraising takes 3–6 months and often longer |
These are rules of thumb, not laws. What matters is the logic behind them: you need enough time to reach the point where the company is either profitable or obviously fundable, and then a buffer for the plan going wrong, because it usually does.
Work backwards from your next milestone
The more useful question isn't "how many months?" but "how many months until what?"
- Name the milestone. Profitability, a revenue number that makes the next round easy, or a product you can charge for.
- Estimate honestly how long it takes. Then add 50%. Founders are reliably optimistic about timelines.
- Add the recovery time. If you miss, how long to cut costs or raise money? For fundraising that's 3–6 months.
- Compare with what you have. If the total is longer than your runway, you need to change something now, not later.
The danger zones
Under 12 months, raising soon: start fundraising conversations now. Investors can smell a company that has to close a round, and terms get worse.
Under 6 months: this is the point to act, not plan. Cut anything that isn't directly tied to revenue or survival, collect every unpaid invoice, and decide whether you're raising, cutting to profitable, or both. Read how to reduce burn rate for the order to cut in.
Under 3 months: you're out of time for most fundraising. The options are cutting to profitability, bridge money from existing investors, or winding down in an orderly way while you still can.
Bootstrapped founders: count your own runway too
If you're not paying yourself, the company's runway isn't the real constraint. Your personal runway is. A company with infinite runway because it costs nothing to run still dies when you need to take a job. Work out both numbers and plan around whichever is shorter.
Default alive changes the question
If your revenue growth will make you profitable before the cash runs out, you're default alive, and runway becomes much less scary. If not, you're default dead and need to change something. The two ideas together are the best way to think about money in an early company. See default alive vs default dead for how to check which you are.
A simple monthly habit
Recalculate runway on the first of every month, with real numbers from your bank and billing, not a forecast. Write it down next to last month's. The trend tells you more than any single number: runway that shrinks faster than one month per month means burn is growing, and you want to see that early.