itsual Startup Runway
Overview
Runway is how many months the company can operate before cash runs out. It is the fundamental survival metric for pre-profit businesses.
When to Use
- Monthly cash and burn tracking
- Fundraising timing decisions
- Cost reduction to extend runway
- Board updates on liquidity
Core Practices
- Define gross burn and net burn clearly
- Calculate runway on conservative cash and burn assumptions
- Scenario plan (base, hire plan, cuts)
- Include committed spends and known cliffs (e.g., annual contracts)
- Start fundraising with adequate runway buffer
Principles
- Optimistic burn assumptions kill companies
- Runway includes only accessible cash
- Growth plans that ignore runway are fantasies
- Default to raising before desperation shows in terms
Verification
- Burn definition is consistent month to month
- Runway uses realistic forward burn, not only last month
- Fundraising timeline fits runway buffer