Imagine flying a plane but not knowing how much fuel is left.
That’s what building a startup without knowing your runway looks like.
Runway = how many months your startup can survive before you run out of cash.
It’s one of the most critical, yet most overlooked, numbers in early-stage decision-making.
How Do You Calculate Runway?
Runway (in months) = Current cash in bank ÷ Monthly burn rate
- Cash in Bank: Your current balance after any recent funding
- Burn Rate: Net cash outflow per month (expenses – revenue)
Example:
- You’ve raised ₹2 crore and spend ₹20 lakh/month.
→ You have 10 months of runway.
Why Runway Matters
1. It’s a Countdown
Runway tells you how long you have to build, grow, or raise more funding.
2. It Drives Your Strategy
- 18+ months → Experiment, build bold, hire
- 9–12 months → Prioritize traction and growth
- <6 months → Tighten costs or start fundraising now
3. It’s What Investors Look At
One of the first questions VCs ask: “How much runway do you have?”
Because that tells them if you’re managing capital wisely and how urgently you’ll need more.
What Affects Your Runway
| Factor | Impact |
|---|---|
| Team size | Biggest fixed cost driver |
| Revenue | Lowers net burn, extends runway |
| Office & overheads | Recurring burn, optimize early |
| Ad spend | Should tie directly to returns |
| Fundraising timeline | Always takes longer than expected |
In the Indian Context
While Indian startups usually run leaner, the downside is steeper in terms of fewer backup options, slower VC cycles, and a tougher climb back after missteps.
- VC cycles are slower
- Many founders bootstrap or raise small rounds
- Down rounds are harder to recover from culturally
A 12–18 month runway is often considered healthy in India, especially if you’re pre-Series A.
Extending Your Runway
If you’re running short on time, here are your options:
- Cut Burn: Delay hiring, reduce marketing, renegotiate with vendors
- Increase Revenue: Short-term pilots, cash-flow friendly deals, quick wins
- Bridge Funding: Angel or SAFE round to buy a few months
- Pivot Efficiently: Focus on the fastest path to user traction or revenue
Many times, Startups don’t die because they run out of ideas. They die because they run out of cash and time.
Final Thought
Runway doesn’t just measure time, it measures control.
When you know how much you have and how fast you’re burning, you make better product, hiring, and fundraising decisions.
Whether you’re in month 18 or month 3, keep your eye on the fuel gauge and adjust your flight plan accordingly.