Runway

Also called Cash runway

How many months you can keep going before the money runs out at the current rate.

What it means

Runway is cash in the bank divided by your net monthly burn rate — how long you can survive if nothing changes.

Borrowed from aviation, and the metaphor is exact: it is the distance available to get off the ground.

Why it matters

It converts a vague anxiety into a date, and a date can be planned against. Six months of runway and a four-month fundraising process is a plan; six months of runway and a "we'll see" is not.

It is the first question any investor asks, because it tells them how much time you have and therefore how much leverage you have.

What it looks like in practice

Cash ÷ net monthly burn. Include everything that actually leaves the account, including tax due later but already earned.

The rule of thumb in funded businesses is to start raising at 9–12 months of runway. Below six months your negotiating position collapses, and everyone on the other side of the table knows it.

What to watch out for

Runway calculated on an optimistic revenue forecast. Do it on committed revenue only, then again with expected revenue, and know both numbers.

Runway that assumes a tax bill will not arrive. It will.

Where to get proper advice

Your accountant for the numbers, and the British Business Bank's business guidance for what the funding options actually are.