Runway is the number of months a startup can operate before running out of cash, calculated as cash on hand divided by monthly net burn. Founders track it monthly (or weekly when cash gets tight), and it is the single most-watched financial metric at an early-stage startup. It is the calendar that determines every other decision: when to raise, when to hire, when to cut, when to push, when to pivot. Running out of runway is the proximate cause behind most stories in [Why Startups Fail].
The math:
Runway (months) = Cash on hand ÷ Monthly net burn
A company with $2M in the bank and $100K/month net burn has 20 months of runway. The same company at $200K/month net burn has 10 months. Doubling burn halves the calendar.
Use net burn (cash ...