Runway calculator — the maths Velofound runs every night
Runway is the number of months until the bank account hits zero at the rate you're losing money. It's the one number a founder should be able to say on any Tuesday, and most work it out wrong — by dividing cash by last month's costs and forgetting the revenue, the one-offs and the trend. This calculator does it the way Velofound's Money page does every night, and shows what actually changes it.
- Runway
- 8.3 months Cash runs out around June 2027 at this burn.
- Average net burn
- −$2,167 Revenue minus costs, averaged over the three months. A one-off spend counts in the month it happened.
- Break-even revenue
- $5,200 $1,600 a month more than this month.
- Runway with those changes
- 49.5 months +41.2 months · runs out around November 2030.
- The verdict the product would give
- 49.5 months of cash at the current burn. Comfortable — keep the burn flat and grow into it.
Averages use only months with something in them, so a business that started last month isn't averaged against two empty ones. The runway date is cash ÷ average net burn from today. Nothing typed here leaves your browser.
How the number is built
The formula is short — cash ÷ net burn — and every word in it is a decision. The calculator above, and the product it's lifted from, makes these decisions the same way each time so the number means the same thing every month.
- Revenue
- Money that actually arrived, net of refunds, in the month it moved. In the product that's paid Stripe orders; here it's what you type. Invoices sent but unpaid are not revenue yet.
- Costs
- Everything recurring, spread to the month it belongs to — a $1,200 annual insurance bill is $100 a month of burn, even though the cash leaves once — plus real one-off spending in the month it happened.
- Net burn
- Costs minus revenue, averaged over the last three months that had anything in them. One good month or one bad one shouldn't swing the answer; three months is enough to smooth without hiding a trend.
- Runway
- Cash in the bank today ÷ average net burn. If revenue covers costs on average, burn is negative and runway is not the question — what to do with the surplus is.
- Runway date
- Today plus that many months. A date is harder to ignore than a decimal: 'March' lands differently from '6.4'.
- Break-even revenue
- Average monthly costs. The revenue that would make burn zero — the number to aim at, and the gap between it and this month is the size of the problem.
The verdict thresholds are deliberate too: under three months means change something this week, three to six means decide now while decisions are cheap, over six means keep the burn flat and grow into it. Those aren't universal truths; they're the bands at which the cost of waiting starts to exceed the cost of acting for a small business with no investor on call.
Four ways to get it wrong
Gross burn instead of net
Dividing cash by total monthly costs ignores that customers pay you. It's the conservative error — it understates runway — but it makes a business with $3,000 of revenue against $5,000 of costs look like it has half the time it has, and founders make panic decisions on it.
One month instead of an average
Last month had a $2,000 equipment purchase, or a customer paid two invoices at once. Either way the runway swings by months and you spend the week reacting to noise. Three months, counting only months that had activity, is the fix.
Counting money you're owed
An invoice is a promise. Runway is cash. A business "owed" $12,000 with $3,000 in the bank has three thousand dollars of runway and a collections problem. Keep the two numbers apart and look at both.
Leaving yourself out of the costs
If you're not paying yourself, the business is being subsidised by your savings and the burn is understated by exactly what you'd need to live on. Put your pay in the costs — the real number is the one where you don't quit.
What actually moves it
Runway has three levers: spend less, charge more, sell more. They aren't equal, and the maths shows why. Here's the business on the homepage — Northline, a one-person mobile bike repair, in month six — with $18,000 in the bank, revenue of $2,400, $3,100 and $3,600 over the last three months, and $5,200 a month going out. Each row is the calculator above with one thing changed.
| Change | Net burn / month | Runway | Months gained |
|---|---|---|---|
| As it is | −$2,167 | 8.3 months | — |
| Cut costs 15% (drop two subscriptions, cheaper van insurance) | −$1,387 | 13.0 months | +4.7 |
| Raise prices 10% (a $60 tune-up becomes $66) | −$1,863 | 9.7 months | +1.4 |
| Four more customers a month at $180 each | −$1,447 | 12.4 months | +4.1 |
| All three | −$363 | 49.5 months | +41.2 |
Three things stand out. The cost cut is the biggest single lever and the only one entirely in the founder's hands this week — it needs no customer to agree to anything. The price rise looks smallest, but every dollar of it is margin with nothing to deliver, and it keeps paying on every booking after. Four new customers a month is worth more than the price rise and costs something to get — ads, outreach, time. And the levers compound: none of the three alone gets Northline to break-even, but together they nearly do, because each shrinks the burn the others are working on. That's the argument for doing the small, boring, reversible things first — a cancelled subscription, a 10% change on new bookings — before the big irreversible one, which is raising money.
What to do with the number
Under three months. This is a cash emergency, whatever it feels like. Cut every cost that doesn't produce revenue this month, collect everything owed, raise prices on new work today, and don't start anything with a payback longer than eight weeks. Fundraising takes longer than three months for almost everyone; a loan against nothing doesn't happen. The way out is revenue and cuts, and it's usually possible.
Three to six months. You have time to change the trajectory, but only if you decide now. Pick the one lever with the biggest effect in the table above for your business and pull it this week; re-run the number in a month. This is also the window in which a small loan or an investor conversation is realistic, because you're asking from a position, not a cliff.
Over six months. Keep the burn flat — the danger now is costs growing with confidence — and spend on the things that move revenue: the ads with proven return, the second van, the hire that frees you to sell. Check the number monthly, not daily.
Common questions
What's the difference between gross burn and net burn?
Gross burn is everything you spend in a month. Net burn is what you spend minus what comes in. Runway uses net burn: a business spending $5,000 and earning $3,000 is losing $2,000 a month, not $5,000. Investors sometimes ask for gross burn as well, because it shows the size of the operation.
How many months should I average?
Three, counting only months that had activity. One month is noise; six hides a trend that started in month four. If the last three months are wildly different — a seasonal business, a big one-off — look at the individual months alongside the average rather than changing the method.
Should I include my own salary in the costs?
Yes, at whatever you actually need to live on, even if you aren't paying it yet. A runway that assumes you'll work for nothing indefinitely is measuring how long the business lasts, not how long you do. If you're genuinely fine on savings for a period, add that period's living costs to the cash instead — it's the same thing, written honestly.
How much runway is safe?
For a small business without investors, six months is the usual comfort line — enough to survive a bad quarter and still have time to react. Startups raising money aim for twelve to eighteen months at each round because a raise takes six. Under three months is an emergency in either world.
Does revenue growth count?
Not in the number itself — runway is measured at the current rate, on purpose, so that optimism can't inflate it. Growth shows up as next month's better number. The scenario column in the calculator is where you test what growth would do, labelled as a scenario.
What about a loan or a credit line?
Undrawn credit isn't cash and doesn't belong in the calculator, but it is a real buffer and it's worth knowing the number: cash plus available credit divided by burn is how long you could last if you had to. Drawn loans go in as cash when they arrive and as a monthly cost (the repayment) from then on.
The number, every night, from real numbers.
Velofound takes revenue from your paid orders, costs from a bank CSV, and gives you runway, break-even and a verdict on the Money page — and a Finance analyst that reconciles it all overnight. Free to start.
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