What Is Cash Runway?
How many months your startup can survive at the current burn rate — and how to extend it.
Definition
Cash runway is the number of months your company can continue operating at its current net burn rate before running out of cash. It is the simplest and most critical survival metric for startups.
Runway = Cash Balance ÷ Net Monthly Burn Rate. If you have $500K in the bank and burn $50K/month net, your runway is 10 months.
How Runway Is Calculated
Basic: Runway = Current Cash ÷ Monthly Net Burn.
Adjusted runway accounts for changing burn rates. If your burn is increasing due to hiring, the adjusted calculation projects forward month by month with the expected burn trajectory, giving a more realistic (and usually shorter) runway estimate.
Varsal calculates both static and adjusted runway from your banking data.
Track this metric live in your dashboard →Why Runway Matters
Running out of cash is the number one reason startups fail. Runway gives you a countdown timer. It determines when you need to fundraise, when to cut costs, and how aggressively you can invest in growth.
Fundraising typically takes 3–6 months. If your runway drops below 6 months and you have not started fundraising, you are in the danger zone.
Runway Benchmarks
18–24 months of runway after raising a round is the standard target. This gives enough time to hit milestones for the next round while maintaining a buffer.
12–18 months is acceptable but tight. Below 12 months means fundraising should be your top priority. Below 6 months is an emergency — consider bridge financing, revenue acceleration, or significant cost cuts.
How to Extend Runway
Three options: increase revenue, decrease expenses, or raise capital. In practice, the fastest lever is usually cutting non-essential expenses.
Review every subscription, contractor, and planned hire. Delay office expansion. Renegotiate vendor contracts. Consider switching from monthly to annual billing to pull revenue forward. And if revenue is growing, model out when you reach cash-flow positive — you may not need to raise at all.
Track Cash Runway in real time
Varsal connects your tools and shows every metric on a single screen. No code, no spreadsheets — just clarity.
Start free trial →