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metrics

Runway

Months of survival with current cash.

Runway represents the number of months your startup can survive with its current cash and burn rate. It's a critical metric for planning fundraising. VCs always look at runway to evaluate deal urgency.

Formula

Runway = Available Cash / Net Burn Rate

Runway is calculated by dividing your available cash by your monthly net cash consumption (Net Burn).

Concrete Example

A startup with $300,000 in the bank and $20,000/month burn.

Runway = $300,000 / $20,000 = 15 months

The startup can survive 15 months before running out of cash.

SaaS Benchmarks

< 6 monthsCritical - Raise immediately
6 - 12 monthsTight - Start fundraising
12 - 18 monthsComfortable - Execute smoothly
> 18 monthsExcellent - Focus on growth

Tips

  • Always maintain 18+ months runway before raising
  • Fundraising takes 3-6 months, plan ahead!
  • Reducing burn by 20% can add months of runway
  • Track runway weekly during tight periods

Common Mistakes

  • Underestimating fundraising time (3-6 months)
  • Not including planned expenses (hiring)
  • Calculating with Gross Burn instead of Net Burn

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Related Terms

BURN RATESEEDSERIES ABRIDGE ROUND

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