Months of runway at your current net burn rate.
Runway
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Net monthly burn
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Cash on hand
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Your breakdown
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Runway is the question every founder loses sleep over
Runway answers one blunt question: how long until the bank account hits zero at the current rate of spending? It is the number a Hong Kong startup founder watches more closely than revenue in the early months, because running out of cash ends the company regardless of how promising the product is. The calculation is deliberately simple so you can run it every month. It takes your cash on hand and divides by your net monthly burn, the amount you spend each month minus the revenue you bring in. This is a cash measure, not a profit measure, which is the right lens when survival is the goal.
Gross burn, revenue and net burn
Gross burn is everything leaving the account each month: salaries, your office or co-working desk, MPF contributions for staff, cloud bills, marketing. Revenue is what comes in. Net burn is the difference, and it is what truly drains the balance. A team spending heavily but already earning real revenue burns far slower than the headline spend suggests. If revenue ever covers the spend, net burn turns zero or negative and the runway is effectively unlimited at that rate, which is the moment a startup stops racing the clock. The tool catches that case and tells you so rather than dividing by a meaningless number. This is why two companies with identical bank balances can have wildly different runways. The one bringing in steady revenue stretches its cash much further, which is why investors look at net burn rather than headline spending when they judge how long your money will last.
Ten months of cash, with revenue softening the burn
Take a startup holding $2,400,000 in the bank, spending $350,000 a month, and earning $110,000 a month. The net burn is $240,000, and the cash divided by that net burn gives the runway:
Ten months is the honest deadline. The standard advice is to start raising your next round when roughly six months remain, so this founder would begin conversations around month four. The chart shows the cash balance falling $240,000 each month until it reaches zero.
Reading runway honestly
Two cautions. Burn is rarely flat, so a single snapshot can flatter you. A new hire, a marketing push or an annual insurance bill all spike the burn, while growing revenue extends the runway, so re-run this monthly with fresh figures rather than trusting a number from last quarter. And remember the figure assumes nothing changes; the whole point of seeing a short runway is to act, by cutting costs, lifting revenue, or raising money, well before the line reaches zero.
Keep runway and profitability apart in your head, because they are not the same thing. A company can sit months away from breaking even yet hold years of runway thanks to a fat bank balance, while another can be nearly profitable but weeks from zero. One trap catches founders repeatedly: a signed contract or an issued invoice is not cash. Until the client actually pays, that money does nothing for your runway, so base the figure on the balance in the bank, not on revenue you are still chasing.
Should one-off costs go into the burn rate?
Keep them separate. A lumpy expense like legal fees for incorporation or a deposit on an office distorts the monthly burn if you bury it in the average. Subtract big one-offs from your cash balance directly, then base the monthly net burn on your steady recurring spend. You will get a far truer runway.
How much runway should I keep before fundraising?
A common rule among Hong Kong and regional investors is to begin raising with six to nine months left, because a round routinely takes three to six months to close. Cutting it finer leaves you negotiating from weakness, since investors can sense a company that has to raise rather than one that chooses to.