How it’s calculated
Gross burn = monthly expenses. Net burn = expenses − revenue. Static runway = cash ÷ net burn. If revenue is growing, we simulate month by month — expenses stay flat, revenue compounds — so runway extends beyond the static figure, and if revenue crosses expenses before cash runs out you're "default alive."
net burn = gross burn − revenue static runway = cash ÷ net burn simulated: cashₘ = cashₘ₋₁ + revₘ − burn, revₘ = revₘ₋₁ × (1 + growth)
Worked example
$500K cash, $60K monthly expenses, $25K monthly revenue growing 5% per month.
- Net burn today: $35K/month — static math says ~14.3 months
- Simulated: revenue covers expenses at month 19, before the cash runs out — default alive
- With zero revenue growth, the same inputs give just ~14.3 months of runway
What’s a good number?
Conventional wisdom: raise or reach breakeven with 6+ months of buffer. 12–18 months of runway is the common comfort zone after a raise; under 6 months means fundraising or cutting now.