Startup Runway Calculator
Calculate months of startup runway from cash balance, monthly burn rate and revenue with break-even analysis
Runway Analysis
Months of Runway
0y 8m
At current burn rate, cash will run out in 8 months
Monthly Burn
£8,000
Monthly Revenue
£2,000
Net Burn
£6,000
Break-Even Target
Revenue Needed to Break Even
£8,000
Additional revenue: £6,000
How Runway Actually Works: Cash / Net Burn
Runway is the number of months until your bank balance hits zero at the current rate of cash outflow. The formula is simple: runway = current cash / (monthly burn - monthly revenue). If you have £50,000 in the bank, spend £8,000 a month and earn £2,000 a month, your net burn is £6,000 a month and you have just over 8 months of runway. The calculator updates in real time as you adjust the three inputs, with a colour-coded warning band (red below 3 months, amber 3-6 months, green above 6).
The number that matters is net burn, not gross burn. Founders sometimes quote impressive-sounding gross burn ('we spend £30,000 a month') without mentioning that they bring in £25,000, leaving net burn of £5,000. Both numbers are true and useful in different contexts: gross burn shows the size of the operation, net burn shows the rate of cash erosion. When investors ask for runway, they want net burn maths; when they ask about cost structure, gross burn.
What 'Healthy' Runway Looks Like at Different Stages
Pre-seed startups (raising under £500k) typically aim for 12-18 months of runway after a raise. This buys enough time to ship the product, get early customers and figure out whether the idea works before raising again. Below 6 months you are in fundraising mode by default, which is exhausting and bad for the product. Above 24 months and you are sometimes accused of being too cautious; investors prefer founders running lean enough to feel urgency.
Seed-stage (£500k-£2m raised) usually targets 18-24 months. Series A typically targets 18-30 months. Bootstrapped startups have no fundraising deadline so the relevant question becomes 'when do we hit profitability?' rather than 'when do we run out of cash?'. The calculator's runway figure shows when cash hits zero at current trajectory; profitability is the moment net burn turns negative (i.e. revenue exceeds burn) and runway becomes infinite. Most startups never reach profitability and either fail or are acquired before they would.
When the Burn Rate Is Lying To You
The standard calculation assumes monthly burn is steady, which it almost never is. Annual subscriptions (Google Workspace, AWS reserved instances, insurance) lump into one month then disappear for 11. New hires add cost in step changes, not gradually. Year-end accountancy fees, VAT bills, and corporation tax all hit specific quarters. A 'monthly burn' figure derived from a single month's bank statement is almost always wrong by 10-30% in either direction.
The honest method is to calculate burn from a 6-month rolling average if you have the history, or to project month-by-month over the next 12 months and average if you do not. Subtract one-off receipts (refunds, deposits returned, asset sales) from the revenue side; add expected one-off costs (annual renewals due, planned hires) to the burn side. The difference between a naive monthly average and an honest forward projection is often the difference between '12 months runway' and '7 months runway and a panic call to the investor in month 5'. The [Compound Interest Calculator](/compound-interest-calculator) helps for treasury planning if you have meaningful cash to invest in money market funds while it sits idle.
Frequently Asked Questions
What counts as 'cash' for runway purposes?
Liquid bank balance plus any short-term deposits you can access in under 30 days. Money in fixed-term bonds maturing in 6 months counts as cash if you can break them at a small penalty. Money tied up in inventory, accounts receivable due in 60 days, or invoiced but unpaid revenue does NOT count - it is real value but cannot pay payroll on Friday. Conservative startups distinguish 'cash on hand' from 'liquid working capital' for this reason.
Should I include VAT in burn?
Burn should be tracked at gross (VAT-inclusive) levels because that is what leaves the bank account. When you reclaim VAT on your next quarterly return, that is a cash inflow that reduces effective burn for that quarter. Month-to-month, treat VAT-out as expense and VAT-in (on sales) as revenue, then reconcile against the quarterly HMRC return.
How does runway differ from profitability?
Profitability is whether revenue exceeds total cost in a given period. Runway is how long your cash lasts. A profitable business has infinite runway by definition (cash is going up, not down). An unprofitable but cash-rich business can have 18 months of runway. Conversely, a 'profitable on paper' business can have 2 months of runway if customers pay 90 days late and the company has no working capital cushion. UK accounting rules let companies look profitable on accruals while running out of cash; runway is the cash-truth metric.
Should I tell my team the runway number?
Most experienced startup advisors say yes, with caveats. A team that knows the company has 7 months of cash will work harder, prioritise revenue, and self-manage cost decisions in a way that no policy document can replicate. The caveat is that sharing the number when it is below 4-5 months can trigger resignations, especially among senior staff who can read the writing on the wall. Most founders share runway monthly above 6 months and switch to weekly cash updates with a smaller leadership group below that threshold.
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