Glossary term
Runway
The number of months until a company runs out of cash, calculated as cash balance divided by monthly net burn.
Runway is the number of months a company can operate before exhausting its cash, calculated as the cash balance divided by monthly net burn. It is the most immediate survival metric for any unprofitable business and the constraint that dictates fundraising timing. A short runway in a tight funding market forces either rapid cost cuts or a down-round raise. See Burn Rate and SaaSpocalypse 101.