Startup Runway Calculator

Know Your Startup’s Expiration Date

In the startup world, cash is oxygen. If you run out of cash before you achieve profitability or raise your next round of funding, your company dies. It is that simple. The most important metric any founder can track is their Runway—the exact number of months the company can survive before the bank account hits zero.

Our free startup runway calculator helps founders instantly assess their financial health. By entering your current cash balance, your average monthly revenue, and your average monthly expenses, the tool will calculate your net monthly burn rate and tell you exactly how many months you have left to turn the ship around.

Understanding Gross vs. Net Burn Rate

To calculate your runway, you first need to understand your burn rate. “Burning” cash simply means you are spending more money than you are making.

There are two types of burn rate:

1. Gross Burn Rate: This is the total amount of money your company spends every month, regardless of how much it makes. If you pay $30,000 in salaries, $10,000 in server costs, and $10,000 in office rent, your Gross Burn is $50,000.
2. Net Burn Rate: This is the actual amount of money leaving your bank account each month after factoring in your sales. If your Gross Burn is $50,000, but customers pay you $20,000 in revenue, your Net Burn is only $30,000.

Your startup’s runway is always calculated using your Net Burn Rate. If you have $300,000 in the bank and a net burn of $30,000 a month, you have exactly 10 months of runway. In 10 months, you will miss payroll.

The “Default Alive” vs. “Default Dead” Concept

Paul Graham, founder of Y Combinator, popularized the concept of being “Default Alive” or “Default Dead.”

• Default Dead: If your expenses remain constant and your revenue continues to grow at its current sluggish pace, you will run out of money before you reach profitability. You must either raise more venture capital or drastically change your trajectory to survive.
• Default Alive: Based on your current cash in the bank, your current expenses, and your current revenue growth rate, you will cross the threshold into profitability before your bank account hits zero. You do not need to raise outside money to survive.

Every founder should know their default status. If you are Default Dead with only 6 months of runway left, you are in a crisis. Raising venture capital often takes 3 to 6 months of pitching, due diligence, and legal paperwork. If you wait until you have 3 months of runway to start fundraising, investors will smell your desperation, offer terrible terms, or simply reject you because the risk of funding a dying company is too high.

How to Extend Your Runway

If your calculator shows a dangerously short runway (anything under 9 months), you must take immediate action. You have three levers you can pull:

1. Increase Revenue: This is the hardest but best lever. If you can close more sales or increase the price of your product, you directly lower your net burn rate. To ensure your products are priced correctly, check out our profit margin calculator.
2. Decrease Expenses: This is the most painful but most controllable lever. Founders must aggressively audit their expenses. Cut unproven marketing campaigns, negotiate cheaper software contracts, and, if absolutely necessary, reduce headcount.
3. Increase Cash Balance: You can inject more cash by raising an emergency bridge round from your existing investors, taking out a business loan, or putting the founder’s personal savings into the business.

Track your runway obsessively. If your marketing spend is generating a high return on investment (ROI), your runway will naturally extend as revenue overtakes expenses and you eventually hit the holy grail: infinite runway.