Runway

Runway is the amount of time a startup can continue operating before it runs out of cash, assuming no additional funding or revenue changes. It's calculated by dividing current cash reserves by monthly burn rate. Startups typically aim for 12-18 months of runway after each funding round to allow time for achieving milestones and raising the next round.

• 1With $500K in the bank and $50K monthly burn, runway is 10 months
• 2VCs typically expect startups to have 18+ months runway post-funding