Runway

How it works

Runway = cash in bank / monthly net burn. It's the most important number on a CEO's dashboard. Founders should start fundraising for the next round when runway hits 6–9 months — leaving enough buffer to negotiate from strength rather than desperation. The 'magic 18 months' rule of thumb is what most early-stage founders aim for post-raise.

Related terms

• Burn rate
  Burn rate is how much cash a company spends per month, net of revenue — the rate at which it's depleting its bank balance.
• Seed round
  A seed round is the first priced (or SAFE) financing of a startup, typically $1M–$5M raised to find product-market fit.