What is startup runway and why does it matter?

Runway is the number of months a company can operate before running out of cash at its current net burn rate. It matters because it determines how long you have to reach profitability or close your next funding round. Investors typically want to see at least 12–18 months of runway before committing capital; having less than 6 months puts a company in crisis mode.

How is runway calculated?

The flat-model formula is Runway (months) = Cash Balance / Net Monthly Burn, where Net Burn = Gross Burn − Revenue. If revenue is growing, the calculator models each month individually using compound growth and finds the month when cash hits zero. For the break-even month it solves n = ln(burn / revenue) / ln(1 + g), where g is the monthly growth rate expressed as a decimal.

What is the difference between gross burn and net burn?

Gross burn is total cash spent each month regardless of any income — salaries, rent, cloud bills, software. Net burn is gross burn minus revenue: it measures how much cash is actually leaving your accounts each month. A startup with £20,000 gross burn and £8,000 MRR has a net burn of £12,000 and a burn multiple of 2.5×.

What is a good burn multiple?

Burn multiple = gross burn / revenue. A burn multiple below 1× means revenue already exceeds spend (self-sustaining). Between 1× and 2× is considered reasonable for a scaling startup. Above 3× is a warning sign that growth efficiency is poor. The lower the multiple, the more each pound of revenue costs to generate.

How much runway should a startup have before raising?

Most experienced founders recommend starting a fundraise with at least 12 months of runway remaining, because a typical Series A or Seed process takes 3–6 months. Raising with less than 6 months is negotiating from weakness and often leads to unfavourable terms or failure to close. The 18-month rule is a common benchmark: raise when you have 18 months left so you land the money before you dip below 12.

Can the calculator model MRR growth?

Yes. Switch the revenue growth model to MRR growth and enter a monthly growth rate. The calculator then compounds revenue each month and finds the exact month (including fractional months) when cash reaches zero, plus the month revenue overtakes gross burn. A 10% monthly growth rate roughly doubles MRR every 7 months and triples it in just over a year.

Startup Runway Calculator

Understanding your startup runway is the single most important financial metric for any early-stage company. It tells you how many months of operation you can fund at today’s burn rate before the bank account hits zero — and gives you the decision window for fundraising, cutting costs, or accelerating revenue.

How it works

The calculator takes three core inputs — cash balance, monthly gross burn and monthly revenue — and produces a runway estimate under two models:

Flat model (no growth): Uses the direct formula

Runway = Cash ÷ Net Burn

where Net Burn = Gross Burn − Revenue. This is the standard investor-grade calculation: conservative, easy to audit, zero assumptions about the future.

MRR growth model: Models every month individually. Revenue compounds at your stated monthly growth rate (for example, 10% per month) while burn stays constant. The calculator finds the fractional month when the cash account reaches zero, and separately solves for the break-even month using:

n = ln(burn / revenue) ÷ ln(1 + g)

where g is the monthly growth rate as a decimal. This reveals whether fast-growing revenue can rescue a company before cash runs out.

Key metrics explained

Burn multiple (Gross Burn ÷ Revenue) is a capital-efficiency score. A multiple of 1× means revenue covers all spend — you are self-sustaining. A multiple of 4× means you are spending £4 for every £1 of revenue, which is typical for very early-stage startups but becomes unsustainable at scale. Below 2× is the threshold many growth-stage investors look for.

Revenue coverage (Revenue ÷ Gross Burn as a percentage) is the mirror image: 100% means break-even, 50% means half your burn is covered, 0% means pre-revenue.

Break-even revenue is simply your gross burn figure: the monthly revenue you need to stop consuming cash entirely. The calculator highlights how far current MRR is from that target.

Worked example

A SaaS startup has:

Cash: £250,000
Monthly gross burn: £20,000 (5 engineers, tooling, hosting)
Current MRR: £5,000
MRR growth rate: 10% per month

Flat model: Net burn = £15,000/month. Runway = £250,000 ÷ £15,000 = 16.7 months.

MRR growth model: Revenue doubles roughly every 7 months. Break-even month: n = ln(20,000 / 5,000) / ln(1.10) = ln(4) / ln(1.10) ≈ 14.5 months. Because break-even (month 14.5) arrives before cash runs out (roughly month 18 once compounding is accounted for), the company reaches profitability with cash to spare.

Scenario	Cash	Burn	Revenue	Runway
Pre-revenue	£250k	£20k	£0	12.5 months
Flat £5k MRR	£250k	£20k	£5k	16.7 months
10%/mo growth	£250k	£20k	£5k (growing)	~18 months
Break-even	£250k	£20k	£20k	Indefinite

Formula reference

Runway (flat): Cash / (Gross Burn − Revenue)
Break-even month (growth): ln(Gross Burn / Revenue) / ln(1 + monthly growth rate)
Burn multiple: Gross Burn / Revenue
Revenue coverage: (Revenue / Gross Burn) x 100%

All calculations run entirely in your browser. No data is uploaded or stored anywhere.