What is Runway?

Runway is cash divided by net burn rate. $180,000 in the bank, burning $30,000 a month, gives you six months of runway — six months before the business stops unless something changes.

The metaphor is aviation and it's precise: runway is the distance you have to get airborne, and it does not extend. When it's gone you're either flying or you're not. Founders track it like a fuel gauge on a long drive with no gas stations, because watching it hit zero by surprise is how good companies die.

The useful thing about the number is what it does to decisions. Twelve months of runway is a strategy horizon; three months is a crisis and should be treated as one immediately rather than at week ten. When it gets short there are only three moves — make more money, spend less, or raise more — and all of them work better early.