What is Runway?
Definition: Runway refers to the amount of time a business has to remain solvent, provided they don’t raise any additional funds.
In Plain English: Runway is how much time your company has before it has a negative balance of cash.
Example: Your business is burning through $1000 of cash each month and it has $3000 in its bank account. Your business’ runway is $3000/$1000=3 months.
Why Should You Care?
Runway is an important number to keep track of, as it tells you how long your business can run before needing additional investment to have a positive balance of cash.