Key takeaways
- Simple runway is cash divided by net burn, where net burn is monthly expenses minus monthly revenue.
- Growth changes the answer. Rising expenses shorten runway; growing revenue can lengthen it or reach break-even before the cash runs out.
- Asking whether break-even comes before the cash runs out, on today's growth, is Paul Graham's "default alive or default dead" test.
- When break-even comes too late, the tool shows how much extra cash the same plan would need to get there.
How to use the runway calculator
- 1Enter the cash in the bank today. Use the balance you can spend, not money promised or committed but not yet received.
- 2Enter monthly expenses (gross burn) and the revenue you actually collect each month. Use the latest full month, or an average of the last three if months vary.
- 3Add the monthly change for expenses, for example from planned hires, and your recent monthly revenue growth. Leave them at 0 for the simple answer.
- 4Pick the first month to project so the results show calendar months.
- 5Read the simple and projected runway, the break-even month and the reading, then open the month-by-month table or copy the summary.
How runway is calculated
Net burn is what the company spends in a month minus what it collects. Simple runway divides cash by that number. It assumes nothing changes, which is rarely true for a company that is hiring or growing, so the tool also projects month by month.
In the projection, expenses and revenue each grow by their own monthly rate. Each month's net burn comes off the cash balance. The month the balance falls below zero is when the cash runs out; spending is assumed to be spread evenly through the month, so a part month shows as a fraction. The break-even month is the first month revenue covers expenses.
| Quantity | Formula |
|---|---|
| Net burn | Monthly expenses − monthly revenue |
| Simple runway | Cash ÷ net burn |
| Expenses in month m | Expenses today × (1 + expense growth)^(m − 1) |
| Revenue in month m | Revenue today × (1 + revenue growth)^(m − 1) |
| Cash at end of month m | Cash at end of month m − 1 − (expenses − revenue in month m) |
| Cash needed to reach break-even | The lowest end-of-month balance before break-even, as a positive amount |
Worked example: one company, five sets of assumptions
A fictional company has $1,200,000 in the bank, spends $100,000 a month and collects $20,000 a month, so net burn is $80,000 and simple runway is 15 months. Here is how the projection changes as the growth rates change, starting in January 2027.
| Assumption | Projected runway | Break-even | Reading |
|---|---|---|---|
| No growth | 15 months (cash out in Mar 2028) | Never | Cash runs out before break-even |
| Expenses grow 3% a month | 12.2 months (Jan 2028) | Never | Cash runs out before break-even |
| Revenue grows 10% a month | Cash lasts | Month 18 (Jun 2028) | Reaches break-even before the cash runs out |
| Revenue grows 6% a month | 18.4 months (Jul 2028) | Month 29 | Cash runs out first; about $229,000 more needed |
| Revenue 10%, expenses 3% a month | 14.7 months (Mar 2028) | Month 26 | Cash runs out first; about $479,000 more needed |
The same company is in a very different position depending on growth. That is why a runway figure means little without the growth rates behind it.
Default alive or default dead
In "Default Alive or Default Dead?" (October 2015), Paul Graham suggests a question for any startup that has been running for a while: assuming expenses stay where they are and revenue keeps growing at its recent rate, does the company reach profitability on the money it has left? If it does, it is default alive; if not, default dead.
The tool's reading follows the same idea with your growth rates. "Reaches break-even before the cash runs out" matches default alive; "Cash runs out before break-even" matches default dead. The extra cash figure tells a founder how much a round, or a cut in costs, needs to cover for the current plan to work.
Limits of the runway projection
- Constant monthly growth is a simplification. Real revenue is lumpy, with annual contracts, seasonality and churn, and real costs jump when people join.
- It counts cash collected, not booked revenue. Annual prepayments and slow-paying customers can move the cash date by months.
- It ignores one-off items such as tax, loan repayments, grants or a round that has been agreed but not received. Adjust the cash figure for those yourself.
- The projection stops at 10 years. It is a planning aid, not a forecast and not financial advice.
Runway in a fund's review
Investors read runway next to the round size: how many months the raise buys and what the company expects to have proved by then. A founder can paste the copied summary into an application, and an analyst can rerun it with more cautious growth rates.
Delsivo's deck analysis, planned for the pilot, is designed to pull figures such as burn and runway from a deck with a citation to the slide, and the claim tracker keeps them labelled Founder reported until someone checks them. See what to check in a deck.
Sources
- Paul Graham: Default Alive or Default Dead? (October 2015) (checked 6 November 2026)
Facts about other companies and services come from the pages listed, on the dates shown, and can change.