Runway is the number of months a company can continue operating at its current burn rate before running out of cash. It is calculated by dividing current cash by monthly net burn. Most investors expect companies to maintain at least 12-18 months of runway.
Definition
Understanding Runway
Runway is the number of months a company can continue operating at its current burn rate before running out of cash. It is calculated by dividing current cash by monthly net burn. Most investors expect companies to maintain at least 12-18 months of runway.
Related Concepts
Related Terms
- Burn rate
- Fundraising
- Financial planning
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