What is runway?

Runway is the amount of time a business can continue operating at its current spending level before running out of cash. It is typically calculated by dividing available cash by monthly burn rate and is a key metric for startups and growing businesses.

Example: A startup with $600,000 in cash and a monthly burn rate of $50,000 has 12 months of runway.

Related terms: Burn Rate, Cash Flow, Forecasting, KPI