Runway calculator
The runway calculator tells you how many months your cash lasts at your burn, with and without your next hire.
Add your revenue growth and it runs Paul Graham's default alive test: does revenue reach costs before the money runs out?
Costs stay flat and revenue grows at the rate you give, month by month, so you know when to cut, hire or raise.
Built by the IndieHacked team
Default dead
- 7 months with the hireOut of cash around June 2027
- $2,900 net burn a monthCosts minus revenue, this month
- 13 months at today's numbers held flat$38,000 over $2,900 a month, no growth
How the numbers work
Runway
Runway is how many months your cash lasts at your net burn, which is costs minus revenue. The calculator steps month by month, adding that month's revenue and subtracting that month's costs, and reports where the cash would drop below zero. With no growth and no hire, that is cash divided by burn.
- Net burn
- costs a month - revenue a month
- Runway at today's numbers
- cash / net burn
- Cash after a month
- cash + revenue x (1 + growth)^(month - 1) - costs
Default alive or default dead
Paul Graham asks one question of a startup that burns cash: with expenses held where they are and revenue growing at the rate of the last several months, does it reach profitability on the money it has left? If it does, it is default alive. If not, it is default dead (Default Alive or Default Dead?, October 2015). His advice is to start asking too early rather than too late.
The calculator runs that test on the growth rate you give, with costs flat. It leaves your next hire out of the verdict, because the test holds expenses where they are. The hire's line adds the new cost from the month it starts and shows how far it moves the month your cash runs out.
What it leaves out
Taxes, one-off costs, late payments and price changes are not modelled. Take a one-off cost off your cash before you start, and run it again when a number moves.
Questions founders ask
How do I calculate runway?
Divide the cash you have by your net burn, which is monthly costs minus monthly revenue. $38,000 at a $2,900 net burn lasts 13 months. Revenue growth stretches it and a new hire shortens it.
What does default alive mean?
It is Paul Graham's term, from an October 2015 essay. If expenses stay flat and revenue keeps growing at its recent rate, a default alive company reaches profitability before its money runs out. A default dead one does not, and needs funding, cuts or faster growth.
What growth rate should I use?
Your revenue growth over the last several months, the rate Paul Graham's test uses, rather than your best month. Run it again at half that rate to see how much of the answer depends on growth.
How much runway should a startup have?
Enough to reach the next milestone that changes your options, with time to spare. Paul Graham advised founders with 8 months of runway or less to try to raise money right away (The Fatal Pinch, December 2014). For a funded startup, YC's Gustaf Alströmer put the length of an average funding round at 18 to 24 months (October 2019).
Should my own pay be in the costs?
Yes, if the company pays you or you will need it to. A runway that works only while you go unpaid ends on the day you need the money, and the calculator cannot see that day.
Does a calculator work in euros, pounds or kronor?
Yes. The maths is the same in any currency and the dollar sign is a label. Enter every amount in the same currency.
Is anything I type into a calculator saved or sent anywhere?
No. A calculator runs in your browser and nothing you enter leaves it. Close the page and the numbers are gone.
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