Cash Runway Checklist: Know Exactly How Many Months Your Startup Can Survive

What This Is

Your cash runway is how many months you can operate before your cash runs out. It's the difference between hustle and panic. This checklist gives you a simple, repeatable way to calculate your runway, forecast your burn rate, and plan your next funding round.

Why You Need This

Foundational metric: Runway determines everything — hiring, product roadmap, fundraising timing.
Founder peace of mind: Knowing your number gives you clarity and reduces anxiety.
Fundraising certainty: You'll know exactly when to start raising and how much you need.
Operational discipline: If your runway is short, you'll think twice before big hires or expensive launches.

Calculate Your Cash Runway (15 Minutes)

The formula is simple. The execution takes focus.

The Runway Formula

Runway (months) = Current Cash / Monthly Burn Rate

Step 1: Calculate Monthly Burn Rate (10 Minutes)

Burn rate = (Monthly COGS) + (Monthly OpEx)

COGS (Cost of Goods Sold): Direct costs to deliver your product. For SaaS: AWS costs, payment processing fees, customer support costs.

OpEx (Operating Expenses): All other expenses. Salaries, rent, software subscriptions, marketing, office supplies, insurance.

Tip: Review your last 3 months of financials. Average them to get a realistic burn rate. Don't include one-time expenses (like legal fees) unless you expect them again.

Step 2: Find Your Current Cash (5 Minutes)

Look at your last bank statement or accounting system. This is your cash balance as of today. Add in any upcoming cash inflows (funding, large contracts) and subtract any upcoming cash outflows (unexpected costs, delayed payments).

Step 3: Calculate Runway (1 Minute)

Divide cash by burn rate. Round down to the nearest whole month.

Example:

Current Cash: $150,000

Monthly Burn Rate: $25,000

Runway = $150,000 / $25,000 = 6 months

Runway Categories & Actions

How much runway do you need, and what do you do with it?

Runway Tiers

> 12 months: Healthy runway. Focus on growth, not survival. You have time to build.
6-12 months: Good runway. Plan your next funding round now. Don't wait.
3-6 months: Tight runway. Optimize. Cut unnecessary expenses. Raise capital aggressively.
1-3 months: Critical runway. Re-evaluate business model. Consider pivoting or restructuring. Raise capital immediately.
< 1 month: Emergency. If you can't raise in 30 days, you may not survive. Escalate to stakeholders immediately.

Monthly Runway Review (Every Month)

Runway is not a one-time calculation. Recalculate every month as your cash and burn rate change.

Monthly Checklist

[ ] Update your cash balance: Start of month cash, add month's revenue, subtract month's expenses.
[ ] Calculate new burn rate: Update COGS and OpEx based on actuals.
[ ] Re-calculate runway: New cash / new burn rate.
[ ] Forecast 12 months ahead: Project revenue and expenses. Will runway improve or worsen?
[ ] Plan funding: If runway < 12 months, schedule meetings with investors.
[ ] Make changes: If runway is short, cut costs, accelerate revenue, or raise capital.

Worked Example

A hardware startup had $180,000 in the bank and a monthly burn rate of $30,000. Their runway calculation showed 6 months.

They updated their runway review monthly. In month 4, burn rate increased to $35,000 due to hiring. Runway dropped to 4.1 months.

They immediately: (1) cut a $5,000/month expense, (2) accelerated a contract closing that would bring in $100k over 3 months, (3) sent a term sheet to investors. By month 6, they had raised $500k, new cash was $680k, and runway was back to 18 months.

Lesson: Monthly runway reviews prevent surprise runway cliffs. Early action is everything.