Startup Runway Calculator

• Startup runway = Cash on Hand / Monthly Net Burn Rate (expenses minus revenue)
• VCs recommend maintaining 18-24 months of runway after each fundraise
• Start fundraising when you have 6-9 months of runway remaining (rounds take 3-6 months to close)
• Net burn rate is the key metric: Monthly Expenses - Monthly Revenue = actual cash depletion
• A burn multiple below 1.5x signals efficient growth and Series A readiness

Use Cases

Frequently Asked Questions

What is startup runway?

Startup runway is the number of months a company can continue operating before it runs out of cash. It is calculated by dividing total cash reserves by the monthly net burn rate (total expenses minus revenue).

How do you calculate burn rate?

Gross burn rate is total monthly operating expenses. Net burn rate subtracts monthly revenue: Net Burn = Monthly Expenses - Monthly Revenue. Net burn is the more useful metric as it shows actual cash depletion.

What is a good runway for a startup?

VCs recommend 18-24 months of runway after a fundraise. The minimum acceptable runway before initiating fundraising is 6 months. Median startup runway has tightened to approximately 12 months as of 2025-2026.

When should a startup start fundraising?

Start fundraising when you have 6-9 months of runway remaining. Most rounds take 3-6 months to close, so this gives you a buffer. Y Combinator advises never letting cash drop below 3 months of runway.

What is the difference between gross and net burn rate?

Gross burn rate is total monthly cash spent on operations (payroll, rent, tools, marketing). Net burn rate accounts for incoming revenue: Net Burn = Gross Burn - Revenue. Net burn is what actually drains your bank account.

What is burn multiple and why does it matter?

Burn multiple = Net Burn / Net New ARR. It measures efficiency of spending to revenue growth. In 2026, investors expect below 1.5x for Series A. Above 2x makes fundraising significantly harder.

How can I extend my startup's runway?

Three main strategies: (1) Reduce operating expenses — personnel costs represent 60-70% of burn. (2) Increase revenue through higher sales or annual billing. (3) Raise additional capital. Hiring freezes and vendor renegotiations are the fastest levers.

How often should founders check their runway?

Y Combinator advises checking runway every week. At minimum, review monthly. Track both the number (months remaining) and the trend (is burn accelerating or decelerating?).