How to calculate runway
Divide available cash by the net monthly burn.
1
Enter cash
Use unrestricted cash, not receivables or credit lines.
2
Add monthly revenue
Use recurring, collected revenue rather than bookings.
3
Add monthly expenses
Include payroll, rent, software and all operating costs.
What does this tool do?
Cash runway is the number of months before cash runs out if spending and revenue stay at current levels. It is a planning estimate, and the most useful version tracks net burn rather than gross spending.
The Formula
Runway (months) = Cash balance ÷ (Monthly expenses − Monthly revenue)Frequently Asked Questions
Should runway use gross or net burn?
Use net burn for a realistic runway because revenue offsets spending. Gross burn is useful for understanding total spend but overstates how quickly cash disappears.
What runway should a startup target?
Many companies aim for at least 12 to 18 months to raise the next round without distress. The right buffer depends on revenue predictability and fundraising conditions.