How to calculate startup runway without hiding the assumptions

Start with spendable cash and cash equivalents. Identify restricted money and amounts already committed to taxes, debt or other obligations. Keep expected fundraising and unsigned sales separate from cash in the bank.

A founder's household savings are not automatically business cash. If you plan to contribute them, show the transfer in both forecasts. If you reserve an emergency buffer, remove it from available cash once, rather than deducting it again elsewhere.

Gross burn is cash going out. Net burn subtracts cash coming in. Use a consistent period and include the recurring and irregular costs that belong to that period. Revenue booked in accounts is not necessarily a payment received.

Worked example: $60,000 of available cash, $5,000 of monthly outflows and $2,000 of monthly receipts imply $3,000 of net burn and 20 months of runway if those amounts stay constant. With no receipts, the same cash lasts 12 months. These are hypothetical scenarios, not benchmarks.

Build a cash forecast that places payments in the week or month they arrive. A positive annual forecast can still contain a period with insufficient cash. BDC describes a rolling 13-week forecast as one way to examine that timing.

Compare the base case with a delayed customer payment or a known cost increase. State which assumption changed and what action the new forecast would trigger. If net burn is zero or negative, the static estimate has no depletion date under those assumptions; it does not mean the business can never run out of cash.