Use this cash runway calculator to find out what your average monthly cash burn rate is and how many months until your startup runway ends.

What is Cash Runway, Anyway?

Cash runway is the amount of time a company can continue to operate at its current burn rate before it runs out of cash. The burn rate is the rate at which a company is spending its cash reserves.

Cash Runway Formula:

Cash Runway 🟰 Current Cash Reserves ➗ Monthly Cash Burn

Examples:

• Company A:
  • Current Cash Reserves: $500,000
  • Monthly Cash Burn: $50,000
  • Cash Runway: 500,000/50,000 = 10 months
  • Company A can operate for 10 more months before it runs out of cash, given the current spending and income pattern.

• Company B:
  • Current Cash Reserves: $750,000
  • Monthly Cash Burn: $125,000
  • Cash Runway: 750,000/125,000 = 6 months
  • Company B has enough cash to sustain operations for another 6 months before running out of money.

TL;DR: cash runway provides a timeframe for how long a company can sustain its operations without additional funding, allowing management to make informed decisions about financing and cost-cutting if necessary.