Startup Runway: How Long Until the Money Runs Out?

Simple definition

Runway is the number of months your business can survive at its current burn rate before running out of money. It's the most concrete version of "how much time do I have left?" If you have $18,000 in the bank and spend $3,000/month more than you earn, you have 6 months of runway.

For solo founders, runway is your most constrained resource. You can always find more ideas, more features to build, more channels to try. But you can't manufacture more time if the bank account hits zero. Runway forces you to prioritize ruthlessly.

How to calculate it

Runway = Cash on hand / Monthly burn rate

Your burn rate is your total monthly expenses minus your total monthly revenue (net burn). If you're already profitable, your runway is infinite -- congratulations.

Say you have $24,000 in savings, your monthly expenses (hosting, tools, contractors, living costs allocated to the business) are $4,200, and your MRR is $1,800:

Net burn = $4,200 - $1,800 = $2,400/month

Runway = $24,000 / $2,400 = 10 months

If your MRR grows to $2,800 next month, your burn drops to $1,400 and runway extends to 17 months. Revenue growth extends runway faster than cutting costs (usually).

Example

You quit your job with $30,000 saved. Monthly expenses: $3,500 (rent, food, hosting, tools). MRR on day one: $0. Runway = 8.6 months. By month 3, your MRR is $600, so net burn is $2,900 and remaining runway with $19,500 left is 6.7 months. By month 6, MRR is $2,200 and net burn is $1,300 with $12,000 left -- runway is now 9.2 months and growing. You're still not profitable, but your runway is extending because revenue is growing faster than cash is draining. That trend line is what matters.

Related reading

• Burn Rate
• MRR