Runway
Runway is a cash and runway metric, calculated as Cash ÷ net monthly burn.
- Layer
- Metric
- Defined in
- Metric definitions
- Components
- 1
Authority
This definition follows Non-GAAP financial measure — SEC Regulation G — it is not a GAAP measure, so a registrant publishing it has to reconcile it to the nearest GAAP figure.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
Formula
Cash ÷ net monthly burn
State which burn. Gross-burn runway is a different, shorter number..
A metric without its definition is a number people argue about in meetings. Every metric component in this system requires one — see the rules.
The lesson that teaches this
Accounting, 0 to 1 — a free course taught end to end on one month of one company, with the spreadsheet exercises to work it yourself.
Runway, in use
Quoted from the 4 documents that use the word — what it does to an interface, in the spec's own sentence.
Months of runway, current cash, monthly burn, projected zero date.
Runway is 4,200,000 ÷ 230,000 = 18.26, rendered "18.3 months at trailing-3-month net burn".
Blending them is how a company thinks it has runway it doesn't.
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- RunwayHow many months your cash lasts at the current net burn: cash divided by monthly net burn. It's a metric, not a GAAP figure.
- Burn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
- Payment terms explained: Net 30, discounts and late feesHow to choose payment terms, count a due date, price an early-payment discount, set lawful late fees and work with enterprise procurement.
- Why startups should close their books every monthA monthly close turns a bank balance into numbers an investor, an auditor or a 409A firm will accept. What it is, and why it gets expensive to skip.
Components that render this
The concept is not documentation-only. These are the components that name it in their specification, grouped and stated exactly as the catalog states them.
Also in Cash & runway
Work with this concept
The calculators that compute it and the ledger payloads that carry it. A definition is where a reader starts; these are where they go next.
Defined in Metric definitions. This page is generated from that document, so the two cannot disagree.