Finance
Runway
Runway is the length of time a company can continue operating before it exhausts its cash, calculated as the current cash balance divided by net monthly burn. It is expressed in months and is the primary constraint on planning for a company not yet profitable.
In plain terms: How many months of cash you have left at the current rate.
Why it matters
Fundraising takes longer than founders plan for, which is why the conventional guidance is to start raising with several months of runway remaining rather than a few weeks. Negotiating from a position of urgency is expensive.
Read the full guideScaling and fundraising