Runway
Definition
Runway: Runway is the amount of time a startup can continue operating before running out of money, assuming current burn rate remains constant. It's calculated by dividing current cash reserves by monthly net burn rate. Startups typically aim to maintain 12-18 months of runway.
Example Usage
“We started fundraising with 9 months of runway, giving us enough buffer to find the right investors.”
Common Misconceptions
Related Terms
Burn Rate
Burn rate is the speed at which a company spends its cash reserves before generating positive cash flow. Gross burn is total monthly expenses, while n...
Series A
Series A is typically the first significant venture capital funding round after seed, usually ranging from $5M to $20M. At this stage, startups are ex...
Term Sheet
A term sheet is a non-binding document outlining the key terms of a proposed investment, including valuation, investment amount, board composition, li...
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