Your runway is the amount of time your startup has to achieve profitability or another milestone, such as securing additional funding. To calculate your runway, you need to know two things: your burn rate and your cash balance. Your burn rate is the rate at which you are spending money, and your cash balance is the amount of money you have in the bank.
There are a few reasons why it's important to track your runway:
Tracking your runway is an important part of being a startup founder. It helps you be mindful of your spending, makes decisions about when to raise money, and gives you a sense of urgency. If you’re new to startups or thinking about raising venture capital and need a financial model, our platform can help you out. By default, every model built on Sturppy includes runway on the main dashboard.
The number one reason why startups fail is because they run out of cash and lose track of their runway. Don’t become a statistic, keep an eye on your runway!