Startup Runway Calculator

Estimate runway (months) from cash, burn, and growth

Startup runway answers a simple question with high stakes: how many months can you operate before cash hits zero if your current spending and revenue trends continue. This calculator uses a month-by-month simulation so you can test scenarios such as hiring, cost cuts, or faster sales growth.

A runway estimate is most helpful when it is tied to a decision: when to start fundraising, how aggressively to hire, whether to cut discretionary spend, or what revenue milestone you need to hit. Because the model is transparent and uses only a few inputs, it is also useful for aligning a team on assumptions (for example, whether “monthly expenses” includes founder salary, or whether revenue is collected net of refunds).

What this calculator includes (and what it does not)

The model is intentionally lightweight. It treats each month as one step, assumes expenses and revenue are roughly stable within that month, and then applies your growth rates for the next month. It does not automatically include one-time events (a funding round, a large annual invoice, a tax payment, or a hardware purchase). If those matter, run separate scenarios by adjusting the inputs.

In other words, this is a trend-based runway calculator. It is not a full cash-flow forecast with accounts receivable timing, payment terms, deferred revenue, or seasonality. If your business has lumpy cash movements (for example, annual contracts paid upfront, or quarterly tax payments), you can still use this tool as a quick “directional” check, then validate with a detailed spreadsheet.

Inputs: how to choose realistic values

• Current Cash Balance ($): cash you can actually spend (exclude restricted cash or reserves you will not touch). If you have multiple bank accounts, use the combined spendable balance.
• Monthly Expenses ($): your typical all-in operating costs (payroll, contractors, rent, tools, cloud, marketing). Many teams use a 3–6 month average to smooth one-off spikes.
• Monthly Revenue ($, optional): recurring revenue collected in a typical month. If pre-revenue, keep it at 0. If revenue is seasonal, consider using a conservative average.
• Monthly Expense Growth (%): expected month-over-month change in expenses (compounded). Example: 2 means expenses multiply by 1.02 each month. Use negative values to model planned cost reductions.
• Monthly Revenue Growth (%): expected month-over-month change in revenue (compounded). Example: 5 means revenue multiplies by 1.05 each month. Use negative values to model churn or contraction.

Formula and simulation logic

Let B be cash balance, E monthly expenses, R monthly revenue, and growth rates g_e and g_r (as decimals). Each month the calculator does:

• B ← B + R − E
• E ← E × (1 + g_e)
• R ← R × (1 + g_r)

The reported runway is the number of months until B becomes zero or negative (with a safety cap to prevent infinite loops). If your revenue eventually exceeds expenses and the balance never reaches zero within the simulated period, the result will indicate that funds do not run out in the simulation window.

Worked example (quick check)

Suppose you have $300,000 in cash, $50,000 in monthly expenses, and $20,000 in monthly revenue. With 0% growth for both expenses and revenue, net burn is $50,000 − $20,000 = $30,000/month, so a rough estimate is $300,000 ÷ $30,000 = 10 months. If you then set revenue growth to 5% and expense growth to 2%, the simulation will typically show a runway that differs from 10 months because both revenue and expenses change over time.

Another quick scenario: if you are pre-revenue with $180,000 cash and $45,000 expenses, your simple runway is about 4 months. If you plan a cost reduction that lowers expenses by 10% next month and then keeps them flat, you can approximate it by entering a lower expense number (for example $40,500) and setting expense growth to 0%. The point is not to be perfect; it is to see how sensitive runway is to the levers you can actually pull.

How to interpret the result

Treat runway as a planning range, not a promise. A useful workflow is to run three scenarios: (1) conservative (higher expenses, lower revenue growth), (2) base case (most likely), and (3) aggressive (higher revenue growth, possibly higher spending). If your conservative runway is uncomfortably short, you have an early signal to cut burn, increase revenue focus, or start fundraising sooner.

Many founders also track a “minimum safe runway” threshold. For example, if fundraising typically takes 4–6 months from first meetings to cash in the bank, you might decide that dropping below 6 months triggers a plan: reduce burn, accelerate sales, or begin a raise. The exact threshold depends on your market, your traction, and how predictable your revenue is.

Assumptions and limitations

• Monthly time step: results are in whole months; real cash-out dates can vary within a month.
• Compounding growth: monthly growth compounds quickly; 5% monthly is much larger than 5% annual.
• No one-time inflows/outflows: model does not include funding rounds, annual prepayments, taxes, or large purchases unless you adjust inputs.
• Not financial advice: use for planning and communication; validate critical decisions with a detailed cash forecast.

Common definitions: burn rate, net burn, and runway

Teams sometimes use the same words to mean different things, so it helps to be explicit:

• Gross burn is your monthly expenses (cash outflows) before considering revenue.
• Net burn is expenses minus revenue for the month. If revenue is higher than expenses, net burn is negative (you are cash-flow positive).
• Runway is how long your current cash can cover net burn before you reach zero cash, assuming the trend continues.

This calculator effectively models net burn over time by simulating both expenses and revenue with optional growth rates. If you want a quick sanity check, you can still do the back-of-the-envelope version: runway ≈ cash ÷ (expenses − revenue), but that shortcut breaks down when growth rates are meaningful.