How to Calculate Runway: The Formula Every Founder Needs

Runway is one of the most important numbers a founder tracks. It tells you how many months you have before the bank account hits zero — and by extension, how much time you have to hit your next milestone, close your next round, or reach profitability.

Understand it wrong and you'll either panic too early or run out of time without seeing it coming. This guide covers the formula, the calculation steps, a worked example, benchmark expectations, and the most common mistakes founders make.

What Is Runway?

Runway is the number of months a company can continue operating at its current burn rate before running out of cash. It's a forward-looking metric derived from two inputs: how much cash you have and how fast you're spending it.

Think of it like fuel in a car: runway tells you how far you can go before you need to refuel (raise more money, reach profitability, or cut costs).

The Formula

```text

Runway (months) = Cash in Bank

─────────────

Net Burn Rate per Month

```