Startup Runway refers to the amount of time a startup has before it runs out of funds based on its current rate of spending.

It is the time frame in which a startup can continue to operate and pursue its business goals without needing to secure additional funding.

How to calculate Cash Runway?

($) cash balance / ($) monthly burn rate = (Months) Cash Runway

The startup runway is calculated by dividing the total amount of cash the company has in the bank by the average monthly cash burn rate, which is the amount the company spends each month on expenses such as salaries, marketing spend, and other operating costs.

The length of a startup's runway is a factor that impacts every area of the business and can be used for and against founders when they are fundraising.

• Startups with longer runways have more time to refine their products, build their customer base, and generate revenue.

• Startups with shorter runways may need to take more immediate and drastic actions to extend their runway, such as cutting costs or securing additional funding.