Cash Runway Calculator
Calculate how many months your cash will last at your current burn rate. Enter your cash balance, monthly expenses, and monthly revenue to see your runway, the date you will run out, and a plain-English status. Essential for startups and small businesses managing tight cash flow.
What Is Cash Runway?
Cash runway is the number of months a business can continue operating at its current burn rate before it runs out of cash. It is the single most important metric for startups and any business that is not yet profitable — it tells you how much time you have to reach profitability, raise more money, or cut costs.
A 16-month runway means the business has 16 months before cash hits zero at the current net burn rate. That sounds comfortable, but runway can shrink quickly if expenses rise or revenue falls. Most startups aim for at least 12–18 months of runway to give themselves time to hit milestones before raising again.
Cash Runway Formula
Net Monthly Burn = Monthly Expenses − Monthly Revenue
Cash Runway (months) = Current Cash Balance ÷ Net Monthly Burn
- Cash balance — total cash currently available (including bank accounts and liquid investments)
- Monthly expenses — total cash out per month (salaries, rent, subscriptions, COGS, marketing, etc.)
- Monthly revenue — cash collected from customers per month
- Net burn — expenses minus revenue; the actual cash consumed each month
Worked Example
A business has $500,000 in cash, spends $50,000 per month, and generates $20,000 per month in revenue:
Net monthly burn = $50,000 − $20,000 = $30,000
Cash runway = $500,000 ÷ $30,000 = 16.7 months
Revenue covers 40% of expenses ($20,000 ÷ $50,000), so the business needs either revenue growth or cost reduction to extend runway beyond 16.7 months.
Interpretation: 16.7 months is healthy for most startups — enough time to hit milestones, raise the next round, or reach profitability. But if expenses are expected to grow, or revenue forecasts are optimistic, the actual runway may be shorter.
How to Interpret Cash Runway
- Above 18 months (Excellent) — strong position. Plenty of time to execute the plan and hit milestones without fundraising pressure.
- 12–18 months (Healthy) — typical target range for startups. Enough time to reach the next funding milestone or profitability.
- 6–12 months (Caution) — starting to be tight. Begin fundraising now, not in 3 months — fundraising takes 3–6 months on average.
- 3–6 months (Critical) — urgent. Cut costs and fundraise simultaneously. Consider bridge funding or inside round.
- Below 3 months (Emergency) — the business is at risk of running out of cash. Immediate cost cuts, emergency fundraising, and honest conversations with creditors.
- Infinite runway — net burn is zero or negative (revenue ≥ expenses). The business is cash-flow positive and not consuming cash.
Frequently Asked Questions
What is a good cash runway?
12–18 months is the standard target for startups. 18+ months gives strong negotiating leverage for fundraising and strategic patience. Below 12 months, the business is under time pressure. Below 6 months, it is in danger. But the right number depends on your situation — a profitable business with strong cash flow needs less runway than a pre-revenue startup.
What is the difference between gross burn and net burn?
Gross burn is total monthly expenses — all cash out. Net burn is expenses minus revenue — the actual cash consumed each month. Gross burn tells you the size of the operation; net burn tells you how fast you are running out of cash. Runway is calculated using net burn. A business with $50K gross burn and $20K revenue has a $30K net burn — runway is cash ÷ $30K, not cash ÷ $50K.
Should I include expected future revenue in the calculation?
Use current run-rate revenue as the baseline — not optimistic projections. Revenue forecasts are usually wrong, and runway that depends on hitting aggressive projections is not real runway. If revenue growth is genuinely expected, model it separately with multiple scenarios (conservative, base, aggressive). The conservative scenario is the one to plan around.
How can I extend my cash runway?
Two levers: reduce burn or increase revenue. Reducing burn is usually faster and more certain — cut non-essential expenses, renegotiate contracts, delay hires, reduce marketing spend. Increasing revenue can also extend runway if it is profitable revenue (not just top-line growth with high costs). The best approach is to do both simultaneously. In the short term, cutting costs is the more reliable lever.
When should I start fundraising?
Fundraising typically takes 3–6 months from start to close. You should start fundraising when you have 9–12 months of runway left — not when you have 3. Starting too late means you will be fundraising from a position of weakness, with less negotiating leverage and higher risk of a down round or no round at all. The best time to raise is when you do not need the money.
Does cash runway account for capital expenditures?
This calculator uses monthly expenses as the burn input — which should include all cash outflows, including capital expenditures. If you make large one-time purchases (equipment, property), either include them in the monthly average or add them separately. Ignoring capital expenditures will overstate runway. The most accurate runway calculation includes all actual cash outflows.