Runway

Runway is the estimated time a company can continue operating before it exhausts available cash at its current net burn.

Why it matters

Runway constrains hiring, platform investments, experimentation, and negotiating leverage. A team with little runway may need to prioritize immediate revenue or financing milestones over broad technical ambitions.

Mental model

Runway is time remaining under a set of assumptions. It changes whenever cash, revenue, spending, or growth plans change.

Practical considerations

• Recalculate runway with multiple revenue and expense scenarios.
• Include hiring plans and contractual commitments.
• Preserve time to raise funds before cash becomes critical.
• Translate engineering initiatives into cost and milestone effects.

Common mistakes

• Treating runway as a fixed number.
• Using gross spending instead of net burn without explanation.
• Waiting until runway is short before adjusting plans.