# Startup runway calculator

> A runway calculator tells you how many months a startup can keep going on the cash it has. Enter cash in the bank, monthly expenses and monthly revenue for the simple answer, cash divided by net burn. Add monthly growth for expenses and revenue to project the month the cash runs out, the break-even month and whether break-even comes first. It runs in your browser.

Source: https://delsivo.com/tools/runway-calculator · Updated 2026-11-06

## 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

1. Enter the cash in the bank today. Use the balance you can spend, not money promised or committed but not yet received.
2. Enter 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.
3. Add the monthly change for expenses, for example from planned hires, and your recent monthly revenue growth. Leave them at 0 for the simple answer.
4. Pick the first month to project so the results show calendar months.
5. Read 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.

Formulas

| 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](https://delsivo.com/claims-and-evidence) keeps them labelled Founder reported until someone checks them. [See what to check in a deck](https://delsivo.com/how-to-evaluate-a-pitch-deck).

## Frequently asked questions

### How do you calculate startup runway?

Divide the cash in the bank by the monthly net burn, which is monthly expenses minus monthly revenue collected. $1.2 million of cash with $80,000 of net burn gives 15 months. If expenses or revenue are changing, project month by month instead of using one division.

### What is the difference between gross burn and net burn?

Gross burn is everything the company spends in a month. Net burn is gross burn minus the cash it collects from customers in that month. Runway uses net burn, because revenue offsets part of the spending.

### What does default alive mean?

Paul Graham's term for a startup that would reach profitability on the money it has left, assuming expenses stay flat and revenue keeps growing at its recent rate. If it would run out of cash first, it is default dead. The calculator applies the same test with your own growth rates.

### Why is my projected runway shorter than the simple runway?

Because expenses are set to grow faster than revenue, so net burn rises each month and the cash goes faster than a flat division suggests. If revenue grows faster than expenses, the projection is longer instead.

### Is the runway calculator private?

Yes. It runs entirely in your browser and needs no account. The cash, expense and revenue figures you type are not sent to Delsivo or anyone else, and nothing is stored after you close the tab.

## Sources

- [Paul Graham: Default Alive or Default Dead? (October 2015)](https://paulgraham.com/aord.html) (checked 2026-11-06)

## Related pages

- [Burn multiple](https://delsivo.com/glossary/burn-multiple)
- [Market size calculator](https://delsivo.com/tools/market-size-calculator)
- [How to verify startup traction](https://delsivo.com/how-to-verify-startup-traction)
- [Claims and evidence](https://delsivo.com/claims-and-evidence)
- [Delsivo for founders](https://delsivo.com/founders)