Startup Runway Calculator — Months Until Cash Runs Out

Runway assumes a flat line

The calculation is cash on hand divided by net monthly burn. With $1,500,000 in the bank and $50,000 of net burn, that is 30 months.

The assumption buried in that division is that burn stays exactly where it is, which it never does. The number describes a company frozen precisely as it is today — not the company you will actually be running in six months.

Costs rise, and revenue may too

Headcount grows, salaries increase, contracts renew higher, and annual insurance or tax payments land unevenly. A company burning $50k today and hiring two engineers is not burning $50k next quarter, so the projection overstates the runway.

The error runs the other way too: new sales and expansion reduce net burn and extend the runway. Neither direction is captured by dividing by a single constant, which is why the honest output is a range rather than a date.

You cannot use the last month of runway

This is the point most people discover too late. The arithmetic produces the month cash reaches zero, but no company operates to a zero balance. Winding down costs money: final payroll, settling payables, notice periods, any severance, and the professional fees of closing things properly.

Practical runway therefore ends materially before the calculated date — and the gap is larger for a company with more staff, since the obligations that must be honoured scale with headcount.

Raising takes longer than the number suggests

A fundraise runs on the order of months, not weeks — prospecting, diligence, negotiation and legal each take their own time, and none of them accelerate because you need them to.

So runway is best read as the time available to reach a milestone or close a round, which means the decision point arrives long before the balance does. A company with six months of cash that has not started raising has considerably less optionality than six months implies, because the process alone could consume most of it.

Model a range, not a number

Build three cases rather than one: burn held flat, burn including planned hiring and renewals, and burn cut to essentials. The spread between them is the actual answer, and the pessimistic case — costs rising while revenue stays flat — is the one worth planning against.

Then pair it with the question that matters: can we reach profitability or close a round before that date? That reframing turns runway from a countdown into a decision framework, which is the only thing it is genuinely good for.

One input caveat: a single month of burn is easily distorted by an annual insurance payment, a quarterly cloud bill or a bonus round. Feed in a figure averaged over several months rather than the most recent thirty days. The tool accepts whatever you type, so the output is exactly as good as that input.

The burn rate calculator separates gross spend from revenue to produce the net figure this tool needs. General business information, not financial advice.