Cash Runway Calculator UK
Work out how many months your cash will last — and the deadline that really matters: when to start raising, not when the money runs out.
Your cash runway is how long your business can keep going before it runs out of money — and the simple version, cash divided by monthly burn, hides the thing that actually kills companies. The first trap is using gross burn (total spend) when you should track net burn (spend minus revenue): £300,000 in the bank with £50,000 of monthly costs looks like 6 months, but if you’re bringing in £20,000 of revenue your net burn is £30,000 and your runway is really 10. The second, more dangerous trap is timing. A UK funding round typically takes around six months from first conversation to money in the bank, so the deadline that matters isn’t when your cash hits zero — it’s roughly six months before that. Firms don’t fail when the money runs out; they fail when they start fundraising too late, from a position of weakness with no leverage. This calculator shows your true runway on net burn and the date you should start raising. To plan the underlying numbers, use the Limited Company Profit Calculator; for the wider picture, the Break-Even Calculator.
Current cash position
Monthly income and costs
One-off items and funding
Scenario assumptions
Cash runway result
Estimated cash runway
Calculating…
Calculating…
Available cash
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Monthly gross burn
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Monthly net burn
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Break-even gap
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Cash-out estimate
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12-month ending cash
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Cash runway — quick lookup
The left table shows how many months £300,000 in the bank lasts at different monthly net burn rates. The right shows the cash you’d need to hold a given runway at a £30,000 net burn. The headline is in the left table: runway is brutally sensitive to burn — halving your burn doubles your runway.
| Monthly net burn | Runway |
|---|---|
| £10,000 | 30 months |
| £20,000 | 15 months |
| £30,000 | 10 months |
| £50,000 | 6 months |
| £75,000 | 4 months |
| Target runway | Cash needed |
|---|---|
| 6 months | £180,000 |
| 12 months | £360,000 |
| 18 months | £540,000 |
| 24 months | £720,000 |
| Fundraise buffer | +6 months |
Runway is cash divided by monthly net burn, so it scales inversely with burn — at £30,000 net burn, £300,000 lasts 10 months; cut burn to £10,000 and the same cash lasts 30. A common target after a raise is 18–24 months of runway, because a round typically takes around six months to close, leaving comfortable time to operate and to start the next raise from strength rather than desperation.
How cash runway works
Cash runway is one of the most-quoted numbers in a business, and one of the most often miscalculated. The formula is trivial; the judgement is in which inputs you feed it, and what deadline you read off the result.
The basic formula
Runway is your cash in the bank divided by your monthly burn — the number of months before you run out of money at the current rate. The arithmetic is simple. The trap is that “burn” can mean two very different things, and using the wrong one either flatters or frightens you about how much time you really have.
Gross burn vs net burn
Gross burn is your total monthly spend, ignoring income. Net burn is spend minus revenue — the cash you’re actually losing each month. A business spending £50,000 but earning £20,000 has a gross burn of £50,000 but a net burn of just £30,000. Using gross burn understates your runway (here, 6 months instead of the real 10); but relying on net burn while your revenue is volatile can overstate it. The honest approach is to track net burn as a rolling three-month average, so a single good or bad month doesn’t distort the picture.
The deadline that actually matters
The number most founders read off runway — “we run out in month 10” — is the wrong deadline. A funding round in the UK typically takes around six months from first investor conversation to cash in the bank. So if you have 10 months of runway, your real deadline to start raising is month 4, not month 10. Leave it later and you’re raising with the clock visibly running down, which kills your leverage and your valuation. Companies rarely die the day the cash hits zero; they die because they began the raise too late.
Worked examples
Four scenarios showing how runway is really read in practice.
Scenario 1 · Gross vs net burn
The same cash, two very different answers
Gross-burn runway: £300k ÷ £50k = 6 months
Net-burn runway: £300k ÷ £30k = 10 months
A startup with £300,000 in the bank and £50,000 of monthly costs panics that it has 6 months left. But it’s earning £20,000 a month, so its net burn is only £30,000 and its real runway is 10 months. Using gross burn here would push it into raising or cutting far too early. Net burn is the truer figure — provided the revenue is reliable rather than a one-off spike.
Scenario 2 · When to start fundraising
Reading the real deadline
Typical UK raise takes: ~6 months
Start raising by month: 4, not month 10
The same business has 10 months of runway. The instinct is to start raising “with a few months to spare,” around month 8. But because the round itself takes about six months, waiting until month 8 means closing at month 14 — four months after the cash ran out. The real trigger is month 4: start the raise then, and you close around month 10 with the round done before the cash is gone, negotiating from strength.
Scenario 3 · Growing revenue masking the risk
A false sense of safety
3-month average net burn: £30,000
Runway on the average, not the latest month
A founder sees net burn dropping as revenue grows and reads runway off the best recent month (£25,000). That flatters the picture. The safer read is the three-month average (£30,000), which smooths out volatility. Growing revenue is good, but projecting it forward optimistically into your runway is how businesses talk themselves into having more time than they do. Base the runway on what’s banked, not what’s hoped for.
Scenario 4 · Default-alive vs default-dead
Can you reach profitability first?
If revenue overtakes spend before cash hits zero → default-alive
If not, on current trajectory → default-dead
The most important question runway can answer isn’t “how long have we got,” but “are we default-alive?” — will growing revenue overtake spend and reach profitability before the cash runs out, on the current trajectory? If yes, you control your destiny and may not need to raise at all. If no, you’re default-dead and must either raise or cut. Asking this early, while you still have runway to change course, is what separates businesses that survive from those that run out of options.
The four numbers behind a runway — and which deadline to read
Most runway calculators stop at cash divided by burn and give you one figure. The businesses that survive look at four numbers, because the single figure hides the decision that actually matters: when to act. Work through them in order:
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1
Net burn, not gross burn
Always run the calculation on net burn (spend minus revenue), smoothed over a rolling three months. Gross burn understates your runway and can panic you into cutting or raising too early; the latest single month can overstate it. The three-month net average is the honest base.
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2
Raw runway — when the cash hits zero
Cash divided by net burn gives the headline runway. It’s the number everyone quotes, but on its own it’s misleading, because it’s not the date you need to act on. Treat it as the starting point, not the deadline.
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3
Fundraising runway — when to start raising
Subtract the time a raise takes (around six months in the UK) from your headline runway. That’s your real deadline to begin the round. Miss it and you raise from weakness, with the clock visible to every investor — the single most common way to lose leverage.
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4
Default-alive — do you even need to raise?
The decisive question: will revenue growth overtake spend and reach profitability before the cash runs out? If yes, you’re default-alive and in control. If no, you’re default-dead and must raise or cut. Knowing which, early, shapes every other decision.
£300k cash, £30k net burn — the four readings
Same business, four different numbers that matter:
The same business reads as 6 months on gross burn, 10 on net, and “act now” if you measure the fundraising deadline at month 4 — three numbers that lead to three completely different decisions. This is why a single runway figure is dangerous: read gross burn and you cut costs you didn’t need to; read the headline net runway and you start raising four months too late. The discipline is to run net burn as your base, treat the headline as information rather than a deadline, work back six months for the fundraising trigger, and keep asking whether you’re default-alive. Get those four right and runway becomes a planning tool rather than a panic button.
What burn should and shouldn’t include
Net burn should capture all cash leaving the business — salaries, rent, software, contractors, marketing, and any loan repayments — minus the revenue actually banked. Watch for lumpy costs that distort a single month: an annual software renewal or a quarterly tax payment can make one month look catastrophic. Spreading or annualising those, and using the three-month rolling average, keeps the runway figure honest. For UK companies, remember to factor in Corporation Tax and any VAT due, since these are real cash outflows even though they’re not “spend” in the usual sense. Use the Limited Company Profit Calculator to map the full cash position.
Two scenarios that change the picture
What if…
You cut net burn by a third?
What if…
You wait until month 8 to start raising?
Key cash runway terms explained
Cash runway brings together a handful of finance terms that founders and finance teams use constantly, often loosely. The ten below cover what you’ll meet when planning your cash position and your next raise.
- Cash runway
- How many months your business can keep operating before running out of money — cash in the bank divided by monthly net burn. The single most-watched number in an early-stage company’s finances.
- Gross burn
- Your total monthly cash spend, ignoring any revenue — salaries, rent, software, marketing and the rest. Useful for understanding your cost base, but it understates runway if you have meaningful revenue coming in.
- Net burn
- Your monthly spend minus monthly revenue — the cash you’re actually losing each month. This is the figure runway should be based on, ideally smoothed as a rolling three-month average.
- Burn rate
- The speed at which you’re spending cash, usually quoted per month. “Burn” alone is ambiguous — always clarify whether someone means gross or net, since the two can differ enormously.
- Fundraising runway
- Your headline runway minus the time a raise takes (around six months in the UK). It’s the real deadline to start a round, since raising later means closing after the cash has gone.
- Default-alive
- A business that, on its current trajectory, reaches profitability before the cash runs out — without needing to raise again. The opposite, default-dead, must raise or cut to survive. A concept popularised by Paul Graham.
- Default-dead
- A business that, on its current path, runs out of money before reaching profitability. It isn’t doomed, but it must change something — raise, cut burn, or grow revenue faster — to survive.
- Cash zero date
- The calendar date your cash is projected to hit zero at the current net burn. Useful as a marker, but dangerous as your planning deadline — the date that matters is months earlier, when you must start raising.
- Operating cash flow
- The cash generated or consumed by day-to-day operations, before financing and investment. Negative operating cash flow is what your runway is funding; turning it positive is what makes you default-alive.
- Bridge round
- A smaller, faster raise to extend runway between major funding rounds, often when a full round isn’t yet achievable. Useful in a pinch, but raising one from a position of low runway weakens your terms.
Five mistakes founders make with cash runway
Cash runway is simple to calculate and easy to misread, and misreading it is one of the most common ways early-stage businesses get into trouble. These five errors, drawn from the recurring r/startups and r/SmallBusinessUK threads, are the costly ones.
Starting the raise too late
The most dangerous error: treating the cash-zero date as the deadline. A round takes around six months to close, so a 10-month runway means starting at month 4, not month 8. Begin late and you raise with the clock running down, losing leverage on terms and valuation — or run out mid-process.
Cost: weak terms or running out mid-raise Fix: start raising 6 months before cash zeroConfusing gross and net burn
Reading runway off gross burn understates it and can trigger panic cuts; reading it off an unusually good single month overstates it. Use net burn — spend minus revenue — as a rolling three-month average, so neither a one-off cost nor a one-off sale distorts the figure.
Cost: cutting too early or relaxing too soon Fix: use 3-month rolling net burnProjecting optimistic revenue into runway
Assuming revenue will keep climbing and baking that into your runway gives you more time on paper than in the bank. If the growth stalls, the runway evaporates. Base runway on banked revenue and current burn, and treat projected growth as upside, not as a reason to delay raising or cutting.
Cost: a runway that vanishes if growth stalls Fix: base runway on banked, not hoped-for, revenueIgnoring lumpy and tax cash outflows
Annual software renewals, quarterly VAT, and Corporation Tax are real cash leaving the business but don’t show up in a typical month’s “spend.” Leaving them out of net burn makes a quiet month look better than it is. Annualise lumpy costs and provision for tax so your runway reflects true cash needs.
Cost: a surprise outflow shortening runway Fix: annualise lumpy costs, provision for taxNever asking “are we default-alive?”
Watching the months tick down without asking whether revenue will reach profitability before the cash runs out is how founders sleepwalk into a crisis. Ask the default-alive question early, while you still have runway to change course — cut burn, accelerate revenue, or raise — rather than discovering the answer with weeks to go.
Cost: discovering you’re default-dead too late Fix: test default-alive while you can still actFrequently asked questions
What is cash runway and how is it calculated?
Cash runway is how many months your business can keep operating before it runs out of money. It’s calculated as cash in the bank divided by your monthly net burn — your spend minus your revenue.
So £300,000 in the bank with a £30,000 monthly net burn gives a 10-month runway. The figure is most useful when you base it on net burn smoothed over three months, rather than a single month or your gross spend.
What’s the difference between gross burn and net burn?
Gross burn is your total monthly cash spend, ignoring income. Net burn is spend minus revenue — the cash you’re actually losing each month. A business spending £50,000 but earning £20,000 has a £50,000 gross burn but only a £30,000 net burn.
Runway should be based on net burn, because gross burn understates how long you have. But if your revenue is volatile, use a rolling three-month average so a single strong month doesn’t flatter the picture.
When should I start fundraising?
Earlier than feels comfortable. A UK funding round typically takes around six months from first conversation to cash in the bank, so subtract that from your runway. With 10 months of runway, you should start raising at month 4, not month 8.
Start later and you risk closing the round after your cash has run out, or raising from a position of weakness with no leverage. Companies rarely fail the day the money runs out — they fail because they began the raise too late.
How much runway should I have?
A common target after a funding round is 18 to 24 months. That gives you time to hit the milestones that justify the next raise, plus the roughly six months a round takes, so you can start the next one from strength rather than desperation.
Below about 12 months, you’re already in the window where you should be planning your next move. The right number depends on your growth, your market, and how quickly you can reach profitability — there’s no single answer, but more cushion is almost always safer.
What does “default-alive” mean?
A business is default-alive if, on its current trajectory, it reaches profitability before the cash runs out — without needing to raise again. If it would run out first, it’s “default-dead” and must raise, cut burn, or grow faster to survive.
It’s the most important question runway can answer, because it tells you whether you control your own destiny. Asking it early, while you still have time to change course, is what separates businesses that survive from those that run out of options.
How can I extend my cash runway?
There are three levers: cut burn, grow revenue, or raise more cash. Cutting burn is usually the fastest and most powerful, because runway scales inversely with it — reducing net burn by a third can add half as many months again.
Growing revenue extends runway more slowly but sustainably, and moves you towards being default-alive. Raising cash buys time but dilutes ownership and depends on investor appetite. Most businesses extending their runway start by trimming burn while working on revenue.
Should revenue be included in the runway calculation?
Yes — that’s the difference between net and gross burn. Including actual banked revenue gives you net burn and a truer, longer runway. The danger is including projected revenue you haven’t earned yet, which inflates your runway on paper.
Base the calculation on revenue already in the bank and your current burn. Treat future growth as upside that you confirm month by month, not as a reason to assume you have more time than your current numbers show.
Does runway include tax and one-off costs?
It should. Corporation Tax, VAT, and lumpy costs like annual software renewals are real cash leaving the business, even if they don’t appear in a typical month’s spend. Leaving them out makes your runway look longer than it is.
The best approach is to annualise lumpy costs and provision for tax across the year, so your net burn reflects the true monthly cash drain. A runway that ignores a looming VAT or Corporation Tax payment can be dangerously optimistic. See gov.uk for UK tax timing.
Related calculators
Cash runway sits on top of your profit, costs, and break-even point. These calculators handle the numbers that feed into it.
Methodology & sources
How the maths works
The calculator divides your cash in the bank by your monthly net burn to give runway in months, where net burn is total monthly spend minus monthly revenue — so £300,000 of cash at a £30,000 net burn gives 10 months. It contrasts this with the gross-burn figure (spend alone), which on the same numbers would read as 6 months, to show how much the revenue offset matters. It then derives the fundraising deadline by subtracting a typical six-month raise process from the headline runway, and frames the default-alive question: whether revenue growth would reach profitability before the cash runs out. Where useful, it works backwards from a target runway to the cash you would need to hold at a given burn.
These are illustrative comparisons to show how runway behaves and which deadline matters. Real outcomes depend on the stability of your revenue, lumpy and seasonal costs, tax timing, how long a raise actually takes in your market, and your growth trajectory, all of which vary. The aim is to reveal that runway is about timing as much as arithmetic — and that the deadline to act is months before the cash runs out — not to replace tailored financial planning.
Assumptions and conventions used
- Runway: cash in bank ÷ monthly net burn
- Net burn: total monthly spend − monthly revenue
- Gross burn: total monthly spend (revenue ignored)
- Recommended base: rolling three-month average net burn
- Fundraising runway: headline runway − ~6 months to raise
- Healthy target: typically 18–24 months after a round
- Default-alive: reaches profitability before cash hits zero
- Tax and lumpy costs should be included in net burn
References
Frequently asked questions
What is cash runway and how is it calculated?
Cash runway is how many months your business can keep operating before it runs out of money. It’s calculated as cash in the bank divided by your monthly net burn — your spend minus your revenue.
So £300,000 in the bank with a £30,000 monthly net burn gives a 10-month runway. The figure is most useful when you base it on net burn smoothed over three months, rather than a single month or your gross spend.
What’s the difference between gross burn and net burn?
Gross burn is your total monthly cash spend, ignoring income. Net burn is spend minus revenue — the cash you’re actually losing each month. A business spending £50,000 but earning £20,000 has a £50,000 gross burn but only a £30,000 net burn.
Runway should be based on net burn, because gross burn understates how long you have. But if your revenue is volatile, use a rolling three-month average so a single strong month doesn’t flatter the picture.
When should I start fundraising?
Earlier than feels comfortable. A UK funding round typically takes around six months from first conversation to cash in the bank, so subtract that from your runway. With 10 months of runway, you should start raising at month 4, not month 8.
Start later and you risk closing the round after your cash has run out, or raising from a position of weakness with no leverage. Companies rarely fail the day the money runs out — they fail because they began the raise too late.
How much runway should I have?
A common target after a funding round is 18 to 24 months. That gives you time to hit the milestones that justify the next raise, plus the roughly six months a round takes, so you can start the next one from strength rather than desperation.
Below about 12 months, you’re already in the window where you should be planning your next move. The right number depends on your growth, your market, and how quickly you can reach profitability — there’s no single answer, but more cushion is almost always safer.
What does “default-alive” mean?
A business is default-alive if, on its current trajectory, it reaches profitability before the cash runs out — without needing to raise again. If it would run out first, it’s “default-dead” and must raise, cut burn, or grow faster to survive.
It’s the most important question runway can answer, because it tells you whether you control your own destiny. Asking it early, while you still have time to change course, is what separates businesses that survive from those that run out of options.
How can I extend my cash runway?
There are three levers: cut burn, grow revenue, or raise more cash. Cutting burn is usually the fastest and most powerful, because runway scales inversely with it — reducing net burn by a third can add half as many months again.
Growing revenue extends runway more slowly but sustainably, and moves you towards being default-alive. Raising cash buys time but dilutes ownership and depends on investor appetite. Most businesses extending their runway start by trimming burn while working on revenue.
Should revenue be included in the runway calculation?
Yes — that’s the difference between net and gross burn. Including actual banked revenue gives you net burn and a truer, longer runway. The danger is including projected revenue you haven’t earned yet, which inflates your runway on paper.
Base the calculation on revenue already in the bank and your current burn. Treat future growth as upside that you confirm month by month, not as a reason to assume you have more time than your current numbers show.
Does runway include tax and one-off costs?
It should. Corporation Tax, VAT, and lumpy costs like annual software renewals are real cash leaving the business, even if they don’t appear in a typical month’s spend. Leaving them out makes your runway look longer than it is.
The best approach is to annualise lumpy costs and provision for tax across the year, so your net burn reflects the true monthly cash drain. A runway that ignores a looming VAT or Corporation Tax payment can be dangerously optimistic. See gov.uk for UK tax timing.
Related calculators
Cash runway sits on top of your profit, costs, and break-even point. These calculators handle the numbers that feed into it.
Methodology & sources
How the maths works
The calculator divides your cash in the bank by your monthly net burn to give runway in months, where net burn is total monthly spend minus monthly revenue — so £300,000 of cash at a £30,000 net burn gives 10 months. It contrasts this with the gross-burn figure (spend alone), which on the same numbers would read as 6 months, to show how much the revenue offset matters. It then derives the fundraising deadline by subtracting a typical six-month raise process from the headline runway, and frames the default-alive question: whether revenue growth would reach profitability before the cash runs out. Where useful, it works backwards from a target runway to the cash you would need to hold at a given burn.
These are illustrative comparisons to show how runway behaves and which deadline matters. Real outcomes depend on the stability of your revenue, lumpy and seasonal costs, tax timing, how long a raise actually takes in your market, and your growth trajectory, all of which vary. The aim is to reveal that runway is about timing as much as arithmetic — and that the deadline to act is months before the cash runs out — not to replace tailored financial planning.
Assumptions and conventions used
- Runway: cash in bank ÷ monthly net burn
- Net burn: total monthly spend − monthly revenue
- Gross burn: total monthly spend (revenue ignored)
- Recommended base: rolling three-month average net burn
- Fundraising runway: headline runway − ~6 months to raise
- Healthy target: typically 18–24 months after a round
- Default-alive: reaches profitability before cash hits zero
- Tax and lumpy costs should be included in net burn