How to Build a Runway Calculator for Startups
Master your startup's cash management with a comprehensive runway calculator. Learn to track burn rate, forecast when you'll run out of money, and optimize your fundraising timeline before it's too late.
Running out of cash is the #1 reason startups fail — not bad products, not competition, but simply running out of money before they can raise the next round or reach profitability. Your runway is how many months of cash you have left at your current spending rate, and tracking it accurately is the difference between strategically timing your fundraising and desperately scrambling for capital when you have 2 months left. Studies show that successful startups maintain 24-36 months of runway in 2025's tighter fundraising environment, giving them breathing room to hit milestones and negotiate from strength. Yet most founders track runway in their heads or with simple back-of-napkin math, missing early warning signs until it's too late. This guide walks you through building a comprehensive runway calculator that tracks your monthly burn rate (how much cash you spend), forecasts your cash position across different growth scenarios, identifies when to start fundraising (hint: much earlier than you think), and helps you make strategic decisions about hiring, spending, and capital raises. Whether you're pre-revenue or scaling quickly, understanding your runway isn't optional — it's survival.
Startup Runway Calculator Template
FREEComplete Google Sheets template with pre-built formulas, sample data, and all 4 tabs ready to use: Monthly Tracker, Burn Rate Analysis, Runway Forecast, and Scenario Planning. Just make a copy and plug in your numbers.
Powered by ModelMonkey•Ready to use with sample data and formulas
What You'll Need
- Access to your company's bank account statements and financial records
- Basic understanding of income and expenses
- Google Sheets or Excel (no advanced skills required)
- Knowledge of your company's monthly fixed and variable costs
- Optional: Revenue projections if you have incoming cash
- Optional: AI assistant like ModelMonkey for automated calculations and scenario modeling
Step-by-Step Guide
Set Up Your Basic Cash Tracking Structure
Create a clean foundation for tracking cash inflows, outflows, and your monthly cash position.
- Create a new Google Sheet with tabs: (1) Monthly Tracker, (2) Burn Rate Analysis, (3) Runway Forecast, (4) Scenario Planning
- In your Monthly Tracker tab, set up columns: Date/Month, Starting Cash Balance, Cash In (Revenue), Cash Out (Expenses), Net Burn, Ending Cash Balance
- Add a header section with key metrics: Current Cash Balance, Average Monthly Burn Rate, Current Runway (in months), Last Updated Date
- Use consistent date formatting: Either use the first day of each month (e.g., 1/1/2025, 2/1/2025) or month names (Jan 2025, Feb 2025)
- Set up data validation: Make sure cash out is always positive (expenses are what leave your account), and cash in is revenue/funding received
- Color coding: Use green for positive cash flow months (revenue > expenses), red for negative (burning cash), and bold for current month
- If using AI: Ask it to "create a monthly cash tracking template with columns for starting balance, cash in, cash out, net burn, and ending balance with formulas to calculate everything automatically"
Pro Tip
Track actual cash movement, not accounting metrics like "accrued revenue" or "accounts payable." Your runway depends on real money in your bank account, not what someone promises to pay you next quarter.
Calculate Your Gross and Net Burn Rate
Understand how much cash you're spending (gross burn) and how much you're losing after revenue (net burn).
- Gross Burn Rate = Total monthly expenses. This is all the money leaving your account: salaries, rent, software subscriptions, marketing, contractors, everything
- Calculate it for the last 3-6 months: Add up all expenses for each month, then calculate the average. Formula: =AVERAGE(C2:C7) where C contains monthly expense totals
- Net Burn Rate = Total monthly expenses - Total monthly revenue. This is how much cash you're actually losing each month after accounting for income
- Example: If you spend $50,000/month on expenses and bring in $20,000 in revenue, your gross burn is $50k but net burn is $30k
- In the Burn Rate Analysis tab, create a table: Month, Total Expenses (Gross Burn), Total Revenue, Net Burn, Notes
- Calculate rolling averages: 3-month average burn and 6-month average burn. Use both because burn rate often changes as you hire or cut costs
- Add a visualization: Create a line chart showing gross burn, net burn, and revenue over time to spot trends
- If using AI: Ask it to "calculate my average monthly gross and net burn rate for the last 6 months and create a chart showing the trend over time"
Pro Tip
Use net burn rate for runway calculations if you have consistent revenue, but use gross burn rate if revenue is unpredictable or lumpy. It's better to be conservative — overestimating how fast you'll run out of money is better than underestimating.
Calculate Your Current Runway
Determine exactly how many months of cash you have left at your current spending rate.
- Basic runway formula: Runway (months) = Current Cash Balance / Average Monthly Net Burn Rate
- Example: If you have $500,000 in the bank and burn $50,000/month (net), your runway is $500,000 / $50,000 = 10 months
- Create a runway dashboard cell in your Monthly Tracker tab: Label it "Current Runway" and use the formula =CurrentCash / AverageNetBurn
- Add a date calculator: If today is January 1, 2025 and you have 10 months of runway, your "Cash Depleted Date" is November 1, 2025. Formula: =TODAY() + (Runway * 30.44) where 30.44 is average days per month
- Account for upcoming cash events: If you know you're receiving a $100k customer payment in 2 months, create a separate calculation showing runway with that inflow included
- Color-code your runway metric: Green if > 18 months, yellow if 12-18 months, red if < 12 months. Conditional formatting keeps it visible
- Important nuance: If you have any revenue, distinguish between "runway at current revenue" vs "runway with zero revenue" (worst-case scenario)
- If using AI: Ask it to "calculate my current runway in months based on my cash balance of $X and average monthly burn of $Y, and tell me what date I'll run out of cash"
Pro Tip
The moment your runway drops below 12 months, you should start fundraising. It takes 4-6 months on average to close a round in 2025, and you need buffer for delays. Starting at 6 months left is too late — investors smell desperation.
Build a Month-by-Month Cash Forecast
Project your cash position forward to see exactly when you'll hit critical thresholds.
- In the Runway Forecast tab, create a projection for the next 24 months: Month, Starting Cash, Projected Revenue, Projected Expenses, Net Burn, Ending Cash
- Starting with next month, use formulas: Starting Cash (Month 2) = Ending Cash (Month 1). Ending Cash = Starting Cash + Revenue - Expenses
- For projected expenses, start with your current average monthly burn. If you plan to hire or make major investments, increase burn in those specific months
- For projected revenue, be conservative: Use the average of your last 3 months, or if pre-revenue, keep it at zero until you have signed contracts
- Highlight critical dates: When cash balance drops below $200k (or 3 months of expenses), mark that month in red. This is your "panic zone"
- Add a "Fundraising Start Date" marker: Place it 6 months before you run out of cash. This is when you MUST be in active fundraising mode
- Create a cash balance chart: Visualize your projected cash over the next 24 months to see the trajectory at a glance
- If using AI: Ask it to "create a 24-month cash forecast starting from my current balance of $X, with monthly revenue of $Y and monthly burn of $Z, and highlight when I drop below 6 months of cash"
Pro Tip
Update this forecast every month with actual results. Most founders build it once and forget it — the value comes from comparing your projections to reality and adjusting your assumptions when you're off track.
Model Different Burn Rate Scenarios
Understand how changes in spending affect your runway so you can make informed decisions.
- In the Scenario Planning tab, create three columns: Conservative (low burn), Base Case (current burn), Aggressive (high burn)
- Conservative scenario: What if you freeze hiring and cut discretionary spending by 30%? Calculate the reduced monthly burn
- Base case scenario: Continue at your current spending rate with planned hires
- Aggressive scenario: What if you double your marketing budget or hire that expensive VP? Calculate increased burn
- For each scenario, calculate: Monthly Burn Rate, Runway (months), Cash Depleted Date
- Create a comparison table showing side-by-side: Scenario Name, Monthly Burn, Runway, Key Assumptions
- Add a sensitivity analysis: "How does runway change if revenue increases by 50%?" or "What if our next hire costs $15k/month instead of $10k/month?"
- Make it interactive: Use dropdown menus or input cells so you can quickly test different spending levels and see the impact on runway
- If using AI: Ask it to "create three burn rate scenarios (conservative, base case, aggressive) and show me how each affects my runway, assuming I have $X in cash today"
Pro Tip
Know your "default dead vs default alive" status: If you reach profitability (revenue > expenses) before running out of cash, you're default alive. If not, you MUST raise money to survive. This mental model forces honest conversations about growth vs. sustainability.
Add Revenue Growth Projections
Model how increasing revenue extends your runway and moves you toward profitability.
- Create a revenue growth model: Starting from current monthly revenue, project growth at different rates: 5% month-over-month, 10% MoM, 20% MoM
- Formula for month-over-month growth: Next Month Revenue = Current Month Revenue × (1 + Growth Rate). Example: $20k × 1.10 = $22k
- Compare scenarios: Show how 10% monthly revenue growth vs 5% growth affects when you reach profitability (revenue = expenses)
- Calculate "months to profitability": How many months until revenue covers your expenses at different growth rates?
- Create a breakeven analysis: At what monthly revenue level do you break even? This is your target to become default alive
- Important: Be realistic about revenue growth. Most B2B SaaS companies grow 10-15% MoM in early stages, not 50%. Overly optimistic projections lead to poor decisions
- Visualize the crossover: Create a chart showing revenue and expenses over time, with the point where they intersect (profitability)
- If using AI: Ask it to "model my revenue growth at 10% month-over-month starting from $X, and show me when I'll become profitable if my expenses stay at $Y per month"
Pro Tip
Revenue projections are almost always wrong, but the exercise is valuable. The goal isn't precision — it's understanding: "At what growth rate do I not need to raise money?" vs "Even with great growth, will I still need to fundraise?"
Set Up Automated Alerts and Monthly Reviews
Create systems to monitor runway without manually checking it every day.
- Add conditional formatting to your current runway metric: Turn the cell red if runway < 12 months, yellow if 12-18 months, green if > 18 months
- Create a monthly review checklist: (1) Update actual cash balance from bank statement, (2) Record last month's revenue and expenses, (3) Recalculate average burn rate, (4) Update runway forecast, (5) Adjust projections based on new information
- Set a calendar reminder: Block 30 minutes on the first Monday of each month to update your runway calculator. Make it non-negotiable
- Add a change tracking column: Show how runway changed from last month. Formula: =CurrentRunway - LastMonthRunway. If it says "-2", you burned 2 extra months of runway
- Build a dashboard summary: One page showing Current Cash, Runway, Burn Rate, Cash Depleted Date, all with color-coding for quick status checks
- Share with your team: If you have co-founders or investors, share the dashboard (view-only) so everyone knows the company's financial health
- Create decision triggers: "If runway drops below 15 months, we start fundraising. If it drops below 10 months, we freeze hiring. If it drops below 6 months, we cut discretionary spending by 50%." Write these down.
- If using AI: Ask it to "create a monthly runway review dashboard that shows current cash, runway, burn rate, and highlights any metrics that have worsened since last month"
Pro Tip
Weekly monitoring is critical when fundraising, when making major expense changes, or when runway drops below 12 months. The more unstable your situation, the more frequently you need to check these numbers.
Plan Your Fundraising Timeline
Use your runway to strategically time your next fundraise before you're desperate.
- Add a "Fundraising Timeline" section: Identify your "Start Fundraising" date (when runway hits 12-15 months) and "Must Close Round By" date (when runway hits 6-8 months)
- Fundraising typically takes 4-6 months in 2025: 4-6 weeks to prepare materials and get warm intros, 6-8 weeks of initial meetings and pitches, 4-6 weeks of due diligence, 2-4 weeks of legal and closing
- Add buffer for delays: Investors move slowly, holidays pause everything, due diligence takes longer than expected. Assume the high end (6 months) rather than the low end
- Calculate your "Target Raise Amount": How much do you need to raise to get to 24-36 months of runway? Formula: Target Raise = (Target Runway in Months) × (Average Monthly Burn) - (Current Cash)
- Example: If you want 30 months of runway, burn $50k/month, and have $200k left: ($50k × 30) - $200k = $1.3M raise needed
- Model the impact of the raise: Create a "Post-Fundraise" scenario showing your new cash balance and extended runway after closing the round
- Add milestones: What do you need to accomplish before you can raise? MRR targets, product launches, customer count. Map these against your runway to ensure you have time to hit them
- If using AI: Ask it to "calculate when I should start fundraising if I currently have X months of runway, and how much I need to raise to extend to 30 months of runway at my current burn rate"
Pro Tip
Never start fundraising when you have less than 9 months of runway. Investors can tell when you're desperate, and it destroys your negotiating power. You'll accept worse terms, higher dilution, and unfavorable conditions just to survive.
Model Cash Extension Strategies
Explore options beyond fundraising to extend your runway when capital is tight.
- Create an "Extension Strategies" section with different ways to add months to your runway without raising money
- Strategy 1 - Revenue acceleration: What if you close deals 30 days faster? Model bringing forward $X in revenue and how it affects runway
- Strategy 2 - Cost reduction: Identify discretionary spending (software tools, contractors, marketing) and model 20% and 40% cuts. How many months does each add?
- Strategy 3 - Hiring freeze: Calculate your monthly hiring plan cost and model delaying all hires by 3 months. Impact on runway vs impact on growth
- Strategy 4 - Payment terms: Negotiate Net-60 or Net-90 payment terms with vendors instead of immediate payment. This is a one-time runway boost
- Strategy 5 - Bridge financing: Model taking a small bridge round ($100k-$500k) to buy 3-6 months instead of a full priced round
- Create a comparison table: Strategy Name, Cash Saved/Added, Runway Extension (months), Downside/Risk
- Combine strategies: "If we freeze hiring AND cut marketing budget by 30%, we extend from 8 months to 14 months, buying time to hit our revenue milestone before the next raise"
- If using AI: Ask it to "show me how my runway changes if I cut expenses by 25%, and calculate how many months that adds to my current runway of X months"
Pro Tip
Cutting burn is painful but often necessary. The key is cutting strategically: protect revenue-generating activities, cut "nice to haves" first. And NEVER lie to your team — if you're cutting costs, be transparent about why.
Track Against Benchmarks and Investor Expectations
Understand how your runway and burn rate compare to investor expectations and industry standards.
- Add a "Benchmarks" section: Research and document typical burn rates for your stage and industry
- Pre-seed benchmarks: $20k-$50k/month gross burn, 18-24 months of runway. Primarily founders + maybe 1-2 employees
- Seed stage benchmarks: $50k-$150k/month gross burn, 18-24 months runway post-raise. Small team of 3-8 people
- Series A benchmarks: $150k-$500k/month gross burn, 24-36 months runway post-raise. Scaling team to 15-30 people
- Calculate your "Burn Multiple": Burn Multiple = Net Burn / Net New ARR. This shows capital efficiency. Under 1.5x is excellent, under 3x is good, over 5x is concerning
- Example: If you burn $100k/month (net) and added $50k in new monthly recurring revenue, your burn multiple is 2x ($100k / $50k)
- Create a quarterly tracking table: Quarter, Runway, Burn Rate, Revenue Growth %, Burn Multiple. Share this with your board or investors
- Add investor expectations: Most VCs want to see: (1) 18+ months of runway at all times, (2) Burn multiple under 3x, (3) Clear path to next milestone before runway drops below 12 months
- If using AI: Ask it to "calculate my burn multiple based on net burn of $X and new ARR added of $Y, and tell me how this compares to benchmarks for a seed-stage B2B SaaS startup"
Pro Tip
Investors obsess over capital efficiency. Two startups with the same revenue but different burn rates are valued completely differently. The one that reaches $1M ARR on $500k of funding gets far better terms than one that spent $3M to get there.
Wrapping Up
Related Guides
How to Build a Cap Table with Dilution Modeling
Model fundraising rounds and understand how much equity you'll give up to extend your runway.
How to Build a Three Statement Financial Model
Create comprehensive financial statements including cash flow forecasts for deeper financial analysis.
How to Automate Financial Reports with AI
Set up automated monthly financial reporting to track burn rate and runway without manual work.
