How Long Until You Run Out of Cash?
29% of startups fail from running out of cash. Know your runway and when to raise. Model pessimistic, realistic, and optimistic scenarios.
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Charts
Cash Balance Over 24 Months (3 Scenarios)
Monthly Revenue vs Costs
Cost Breakdown
Runway by Scenario
For educational and informational purposes only. Verify with a qualified professional.
Cash runway is how many months your business can operate before running out of cash. Burn rate = monthly costs minus monthly revenue. Startups typically aim for 12-18 months of runway. Plan fundraising when you have 6-12 months left. Revenue growth extends runway; cost cuts do too. Model pessimistic, realistic, and optimistic scenarios to see your range.
Sources: SBA, startup benchmarks.
Key Takeaways
- • Runway = cash ÷ burn rate. Burn = fixed + variable costs - revenue.
- • Start fundraising when you have 6-12 months left. Closing takes 3-6 months.
- • Revenue growth extends runway. Model -20%, realistic, and +20% scenarios.
- • One-time expenses (equipment, legal) deplete cash immediately. Plan for them.
Did You Know?
How Does Runway Work?
Burn Rate
Monthly burn = fixed costs (rent, salaries, insurance) + variable costs (materials, marketing) - revenue. Negative burn means cash flow positive.
Runway
Runway = (cash - one-time expenses) ÷ burn rate. If burn is zero or negative, runway is effectively infinite.
Scenarios
Pessimistic: revenue -20%. Realistic: current revenue. Optimistic: revenue +20%. Growth rate compounds each month.
Expert Tips
Runway Benchmarks
| Stage | Typical Runway | Action |
|---|---|---|
| Pre-seed | 12-18 mo | Bootstrap or angel |
| Seed | 18-24 mo | Product-market fit |
| Series A | 18-24 mo | Scale |
| Profitable | Infinite | Reinvest or grow |
Frequently Asked Questions
What is cash runway?
Cash runway is the number of months your business can operate before running out of cash at the current burn rate. Runway = cash balance ÷ monthly burn rate. Burn rate = monthly costs minus monthly revenue. Typical startups aim for 12-18 months.
How do I calculate burn rate?
Monthly burn rate = monthly fixed costs + monthly variable costs - monthly revenue. Fixed costs include rent, salaries, insurance. Variable costs include materials, marketing. If revenue exceeds costs, you have positive cash flow and runway extends.
When should I raise funding?
Start fundraising when you have 6-12 months of runway left. Investors typically need 3-6 months to close. Running out of runway during a raise weakens your negotiating position. Plan ahead.
What is a good runway for a startup?
12-18 months is common for early-stage startups. Pre-revenue companies often aim for 18-24 months. SaaS businesses with recurring revenue can operate on 6-12 months of runway.
How does revenue growth affect runway?
Positive revenue growth extends runway by reducing net burn over time. A 10% monthly growth rate can dramatically extend runway. The calculator models pessimistic (-20%), realistic, and optimistic (+20%) scenarios.
What if I have seasonal revenue?
Seasonal adjustments smooth revenue across months. Use a seasonal factor (e.g., 0.8 in slow months, 1.2 in peak months) to model uneven cash flow. Adjust monthly revenue to reflect typical seasonality.
Key Statistics
Official Data Sources
⚠️ Disclaimer: This calculator is for educational purposes only. Runway and burn rate estimates are illustrative. Actual results depend on revenue accuracy, cost control, and market conditions. Consult a financial advisor or CFO for business planning. Not financial advice.
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