What is Runway Calculation?
Nexa Consultancy | Startup & Finance Glossary
Runway is the number of months a startup can survive before running out of money. It's the ultimate measure of a pre-profitability startup's viability and dictates the timeline for its next fundraising round.
For Startups: For an early-stage startup, a runway of 18-24 months post-funding is considered healthy. This provides enough time to hit significant milestones before needing to raise more capital. A runway under 6 months is a critical danger zone.
For SaaS: SaaS startups must factor in the timing of large annual renewals into their runway calculation. A single large churn event can dramatically shorten the runway unexpectedly.
Calculation: Runway (in months) = Total Cash Balance / Monthly Net Burn
Example: A startup with ₹2 Crore in the bank and a monthly Net Burn of ₹10 Lakhs has a runway of 20 months.