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Startups & Venture Capital

Runway

Also called: cash runway, months of runway

Runway is how many months a company can survive at its current burn before running out of cash. The operating rule is to raise with at least six months left, because a fundraise takes three to six months and desperation is visible in the terms. Extending runway means cutting burn or raising revenue, and cutting late is far more damaging than cutting early.

Formula

Runway (months) = Cash in bank ÷ Net monthly burn

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