Runway (Months)
Definition
Estimated number of months the company can operate at the current net burn before unrestricted cash reaches zero, holding everything else constant. The single most consequential survival input for venture-backed companies — it sets the urgency of every fundraising, hiring, and cost decision. Common pitfall: runway is often quoted off `finance.total_cash_in_bank` and a single-month spot-burn instead of operationally-available cash and a 3-month-trailing burn — the result is a runway that looks 2–4 months longer than it actually is when working capital tightens. Boards should ask which cash and which burn went into the calculation.
Why it matters
Drives the timing of every fundraise, hire, and budget cut — and is the number investors lead with in diligence. Crossing under stage-typical thresholds usually triggers a board-level cost or fundraising conversation.
How it's calculated
runway_months = cash_basis / finance.net_burn_rate, where cash_basis is finance.operationally_available_cash when working capital is material (Series A+), and finance.total_unrestricted_cash otherwise (early stage, when AR/AP is immaterial and the two converge). Never use max() of the two — that discards the more conservative number exactly when working capital is a headwind, the very pitfall this KPI warns about. When net burn is negative (cash-flow positive), runway is unbounded — render as ∞ rather than negative. Most boards use a 3-month-trailing-average net burn for the denominator to dampen single-month noise. How to interpret it
Stage-typical industry context (per the 2024 KeyBanc Capital Markets & Sapphire Ventures SaaS Survey §runway / month-of-cash discussion): private SaaS companies with $10M–$50M year-end ARR median ~25 months of cash; those <$10M or >$50M ARR median ~18 months. Practitioner heuristics (industry folk-wisdom, not citation-grade): under 6 months is critical (immediate fundraise or cost action); 12–18 months is healthy for active fundraising; 24+ months gives optionality. Recalculate any time burn changes materially or a tranche closes.
Source
KBCM/Sapphire SaaS Survey 2024 (15th Annual) · Months of Cash (Runway) by ARR Cohort
Stage relevance
Typically owned by
Related KPIs
Sum of all bank account balances at the reporting cut-off, expressed in a single reporting currency after FX conversion. This is the gross top-of-house cash number — it does not net out restrictions, near-term liabilities, or commitments. The board reads this as the absolute denominator for runway and as a checksum against the cap table (capital raised − cumulative net burn ≈ cash). Common pitfall: founders sometimes report a USD figure that silently includes ILS/EUR accounts at stale FX rates — always reconcile against the bank-accounts list (per FX-aware MultiCurrencyAccountList) and tag the rate date.
Cash that the company can freely deploy for any operational purpose — total bank balances minus any contractually restricted balances. This is the input most boards actually want when judging runway, because it strips out escrows, security deposits, and processor reserves that cannot be spent on payroll or vendors. The distinction matters more as the company adds enterprise contracts (deposit obligations), debt facilities (covenant balances), and payment processing volume (rolling reserves). Common pitfall: at early stage, restricted cash is often near zero so teams equate this with `finance.total_cash_in_bank` — track them separately from day one to avoid surprise reclassifications later.
Unrestricted cash adjusted for near-term working-capital effects — i.e. the cash that is actually deployable after accounting for receivables coming in, payables going out, and accrued obligations crystallizing in the next reporting period. More conservative than `finance.total_unrestricted_cash` because it nets out the cash a healthy AR/AP cycle is already promising or claiming. The board reads this as the "real" cash position when working capital is material to the business (typical at Series A+, when AR/AP cycles get sizeable). Common pitfall: at early stage AR is small and AP is mostly payroll/SaaS, so this collapses to unrestricted cash — once enterprise deals or 60-day net terms appear, the gap widens fast.
Average monthly net cash outflow over the reporting period — total cash spent minus total cash collected, divided by the number of months in the period. The headline survival number for venture-backed startups: it pairs with `finance.total_cash_in_bank` to produce runway, and pairs with revenue growth to produce the Bessemer "burn multiple". Common pitfall: net burn is volatile — large quarterly bills (annual SaaS renewals, employer-tax true-ups), enterprise prepayments, and FX swings can mask the underlying trend. Smoothing over a trailing 3-month average is standard board practice. Equally important: do not silently include one-off cash events (acquisitions, settlements, large prepayments received) without flagging them — boards prefer a "core burn" and "headline burn" pair when the period is noisy.
Forecast burn-rate matrix across three scenarios — conservative (defensive cost plan, slow revenue), mostLikely (current best-estimate), bestCase (aggressive investment with strong revenue) — with gross + net burn for each. Bound to the ScenarioBurnRateMatrix widget alongside the historical `finance.burn_rate_actual` anchor. The board reads this to understand what range of cash trajectories the company is planning for and which one management has chosen as the base case. Common pitfall: the three scenarios cluster tightly (all within ±10% of each other) — that's not three scenarios, it's one scenario with rounding error. Real scenarios should reflect meaningfully different operating decisions and produce visibly different runways.
Target gross capital the company intends to raise in the currently active round (the "ask"). This is the headline number the CEO walks investors through and the board uses to sanity-check dilution and runway implications. Note the distinction from `total_round_size` (which can include third-party participation beyond the company-led ask) and from `minimum_close_amount` (the floor at which the round can close). Common pitfall: the target is updated mid-process when investor demand or strategy shifts — every change deserves a board note.
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