Runway is the single most urgent metric for any pre-profitability startup or bootstrapped
business: how many months can you continue operating at your current burn rate before you
run out of cash?
This calculator computes gross burn (total monthly expenses), net burn
(expenses minus revenue), and runway (cash balance ÷ net burn). It also shows the
date on which your runway ends and how much monthly revenue growth would extend it.
Burn rate definitions
Gross burn — total monthly operating expenses, regardless of revenue.
Net burn — monthly expenses minus monthly revenue. This is what's depleting your bank account.
Runway — months until cash reaches zero: Cash ÷ Net Burn.
How to use the runway calculator
Enter your current cash balance (bank accounts + any credit facilities you can draw).
Enter your total monthly expenses (payroll, infrastructure, subscriptions, etc.).
Enter your current monthly revenue.
Optionally enter a monthly revenue growth rate to model your path to profitability.
Frequently asked questions
When should I start worrying about runway?
When runway drops below 12 months, you need to be actively fundraising or cutting
costs — fundraising typically takes 3–6 months from first meeting to cash in the bank.
Below 6 months, the situation is urgent. Below 3 months, options narrow quickly.
Should I include accounts receivable in my cash balance?
Only if they are reliably collectable within 30 days. A conservative runway calculation
uses only confirmed cash in the bank, not promises of future payment.
What's a healthy runway for a seed-stage startup?
18–24 months is the generally recommended post-seed runway, which gives enough time
to hit the milestones needed for the next round without too-frequent fundraising
distraction.
How Much Startup Runway Do You Need Before Raising?
How many months of runway to have before starting a fundraise, and what burn rate signals investors want to see.
The most common mistake founders make with fundraising is starting too late. By the
time runway drops below six months, your negotiating position is weak and your options
are narrow. Here's how to think about timing your raise.
The fundraising math
A seed or Series A round typically takes 3–6 months from first meeting to term
sheet, and another 4–8 weeks to close and receive the money. Under an optimistic
scenario, you need 4–5 months of runway just to run the process. Under realistic
conditions, 6–8 months.
Rule of thumb: start your fundraise when you have 12 months of runway left.
This gives you:
- 6 months to run the fundraising process (meetings, follow-ups, negotiations)
- 6 months of buffer if the process takes longer than expected
- The psychological position to walk away from bad terms
What burn rate signals to investors
Investors look at burn rate not just as a survival clock, but as a signal of capital
efficiency. High burn relative to revenue growth is a yellow flag. High burn with
strong MRR growth and clear payback period is acceptable.
Key metrics investors want before a Series A:
- Monthly burn clearly explained and controllable
- Path to profitability or next fundraise milestones visible
- Burn multiple < 2x (i.e., you're burning no more than $2 for every $1 of net new ARR)
Default Alive vs. Default Dead
Paul Graham's "Default Alive or Default Dead" framework asks: at your current growth
rate and burn rate, will you reach profitability before running out of cash — without
raising?
If yes: you're default alive. Fundraising is optional and you negotiate from strength.
If no: you're default dead. Every month you don't raise increases the existential risk.
Use the runway calculator above with your monthly revenue growth rate to see your
default alive / default dead status.
Startup Burn Rate Benchmarks — What Is a Good Burn Rate?
Average monthly burn rates for startups by stage and team size, plus the burn multiple metric used by top-tier VCs to evaluate efficiency.
"Burn rate" is the net cash a startup spends each month (expenses minus revenue).
Burn rates vary enormously by stage, team size, and location — but some benchmarks
help founders calibrate whether their spending is appropriate.
Typical monthly burn rates by stage
Stage
Team Size
Typical Monthly Burn
Pre-seed / solo
1–2 people
$5k–$25k
Seed
3–8 people
$50k–$200k
Series A
10–25 people
$200k–$600k
Series B
25–60 people
$500k–$2M
Series C+
60+ people
$1M–$5M+
These are wide ranges. Fully-remote teams with experienced founders spend 30–50%
less than SF/NYC-based teams with equivalent headcount.
Burn multiple — the VC efficiency metric
Burn multiple = Net cash burned ÷ Net new ARR. It measures how efficiently you're
converting cash into revenue growth:
Under 1×: Exceptional (every dollar burned produces more than a dollar of ARR)
1–1.5×: Good (Series A/B standard)
1.5–2×: Acceptable
Above 2×: Concerning (review spending vs growth tradeoffs)
The 18-month rule
Most experienced startup advisors recommend maintaining at least 18 months of runway
at all times. This gives you enough time to either raise a new round or achieve
profitability if fundraising conditions worsen.
Use our Runway Calculator to calculate your exact
runway and model different burn scenarios.
Default Alive or Default Dead — Paul Graham's Startup Test
How to calculate whether your startup is default alive (can reach profitability before running out of cash) or default dead — and what to do if you're default dead.
Paul Graham introduced the "default alive / default dead" framework in 2015. It
asks a single critical question: at your current growth rate and burn rate, will
you reach profitability before running out of money?
Calculating your status
You're default alive if:
- Your current revenue growth rate continues, AND
- You reach monthly profitability (revenue > expenses) before your cash runs out
You're default dead if you would run out of cash before reaching break-even
at your current trajectory.
Why it matters more than runway
Runway alone is misleading because it assumes no revenue growth. A startup with
$50k MRR, $80k monthly burn, 15% monthly revenue growth, and 12 months of cash
reaches break-even in month 5 — it's default alive despite a negative-looking runway.
The three levers
If you're default dead, you have three options (ideally combined):
1. Reduce burn — cut expenses, extend runway
2. Accelerate revenue — focus entirely on sales and customer success
3. Raise capital — extend runway to give the growth curve time to work
Graham's advice: becoming default alive should be the immediate priority before
anything else. Spending time on fundraising while default dead is backwards.
Use our Runway Calculator to model your exact
default alive / default dead status with your current numbers.