Runway indicates how much time a business has before its available cash reserves are depleted, given the current level of spending. It is commonly expressed in months and is critical for planning fundraising cycles, budgeting, and growth strategies.
To figure out Runway, follow these steps:
Look at how much liquid money the company has on hand (bank accounts, cash equivalents).
Determine the average amount spent each month to keep operations running.
Divide the available cash by the monthly spend figure.
The result represents the number of months the company can continue at the current pace.
Runway = Cash Available / Burn Rate
A common target is to maintain 12 to 18 months of Runway. This buffer ensures enough time to raise funds, change strategy, or scale efficiently.
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As it signals how urgently the business must secure new income or funding. Without monitoring, a company may run out of resources unexpectedly.
Runway is mainly impacted by burn rate (monthly spending). Cutting expenses or increasing revenue directly extends the number of months available.
No. A high-growth startup may need a longer Runway to support product development and fundraising, while a profitable company may be less dependent on it.
By slowing down hiring, renegotiating contracts, improving cash collection from customers, or bringing in outside investment.