Runway

Runway is the number of months a startup can continue operating before it runs out of cash. It's calculated as: current cash balance ÷ net monthly burn rate (cash spent minus cash received). Runway is the single most important financial metric for early-stage startups because it determines how much time you have to reach profitability or raise your next round.

The general guidance: always maintain 12–18 months of runway. Start fundraising when you have 6–9 months left — not when you're down to 2 months. Investors can smell desperation, and limited runway destroys your negotiating leverage.

Runway calculation nuance: use net burn (expenses minus revenue), not gross burn (expenses only). A startup spending ₹50 lakh/month with ₹20 lakh/month in revenue has ₹30 lakh net burn — not ₹50 lakh.

Indian startups in 2026 operate in a market where institutional rounds can take 4–6 months to close. This means the effective minimum "raise now" trigger is 8–10 months of runway, not 6. Many Indian founders who started fundraising with 5–6 months of runway in 2022–2023 ran out of cash mid-process.

The default alive concept (Paul Graham's framework) is particularly relevant for Indian startups: if current revenue growth continues, will the company reach profitability before cash runs out? Founders who know this number are in a fundamentally different negotiating position than those who don't.