Calculate how many months of runway your Israeli startup has. Enter current cash, monthly burn rate, and monthly revenue. Computes zero-cash date and net burn.
Enter your current cash balance, monthly gross burn, and monthly revenue to compute net burn, months of runway, and your projected zero-cash date.
Months of runway
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Net monthly burn
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Monthly revenue
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Cash remaining (6 months)
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Revenue needed to break even
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Your breakdown
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Why runway is the most important metric for Israeli startups
In the Israeli startup ecosystem, where funding rounds can take 6 to 12 months to close, runway is the single most important operating metric for early and growth-stage companies. Running out of cash before closing a round forces founders into distress: either accepting unfavorable terms, taking bridge loans at high cost, or shutting down. A well-managed runway gives founders negotiating leverage, time to find the right investor, and the ability to wait for better market conditions. Veteran Israeli investors often say that managing burn is as important as growing revenue because a company that survives long enough almost always finds a path to growth.
Reducing burn rate in an Israeli startup context
The largest cost component for most Israeli tech startups is salaries, which are high by regional standards, particularly for senior engineers and product managers in Tel Aviv and Herzliya. Employer costs include not just the gross salary but also employer Bituach Leumi (approximately 7.6 percent), pension (8.33 percent severance plus 6.5 percent pension), and Keren Hishtalmut (7.5 percent), which can add 22 to 25 percent on top of gross salary. Reducing headcount or hiring more junior staff in lower-cost cities such as Beer Sheva or Haifa can extend runway significantly. Cloud infrastructure optimization, switching to lower-cost office arrangements, and deferring non-essential legal work are also effective burn reduction levers in the Israeli market.
Using IIA grants to extend runway without dilution
The Israel Innovation Authority offers competitive non-dilutive grants to startups conducting R&D in Israel. A typical Rishon (initial) grant covers 20 to 50 percent of approved R&D costs up to a ceiling, with no equity given up. For a startup spending 200,000 ILS per month on R&D, a grant at 40 percent coverage of 2,400,000 ILS annually adds 200,000 ILS per month to effective cash, doubling runway without a funding round. The tradeoff is that IP developed with grant funds must remain in Israel or attract royalty obligations. Startups planning to move IP to a foreign holding structure post-funding should consider the royalty implications before accepting IIA grants. The IIA application process takes several months, so applying early is important for cash planning purposes.
Frequently asked questions
How is startup runway calculated?
Startup runway is the number of months a company can continue operating before it runs out of cash, assuming no additional funding is raised and current burn and revenue trends continue. The calculation is: runway in months equals current cash divided by net monthly burn rate. Net monthly burn is gross monthly expenditure minus monthly revenue. If a startup has 3,000,000 ILS in the bank, spends 400,000 ILS per month, and earns 100,000 ILS per month in revenue, the net burn is 300,000 ILS per month, and the runway is 10 months. The zero-cash date is today plus 10 months. Investors and founders use runway as a key planning metric: a fundraise process typically takes 3 to 9 months in Israel, so maintaining at least 12 to 18 months of runway before starting a round is considered prudent. Running below 6 months of runway before beginning a raise is a distress situation that can significantly weaken negotiating leverage.
What counts as burn rate for an Israeli startup?
Gross burn rate is all cash outflows per month, including salaries (the largest component for most Israeli startups), employer NI contributions (Bituach Leumi, approximately 7.6 percent of salary), rent, cloud infrastructure costs, software licences, legal and accounting fees, insurance, and any other operating expense. Net burn subtracts any cash inflows from revenue, grants, or other recurring income. Israeli startups often receive non-dilutive grants from the Israel Innovation Authority (IIA, formerly OCS), which can materially reduce net burn. Grants typically must be spent on qualifying R&D within defined timelines and require royalty repayment on subsequent commercial revenues. Tracking gross burn separately from net burn is important because gross burn reflects the underlying cost structure; a high gross burn funded by grants can suddenly become acute if grant income stops.
How does Israel Innovation Authority (IIA) grant funding affect runway?
The Israel Innovation Authority provides competitive grants to qualifying technology startups for approved R&D programs. Grants typically cover 20 to 50 percent of approved R&D costs, with startups in preferential zones potentially receiving higher rates. IIA grants are non-dilutive and do not require equity or board seats. However, they come with conditions: the funded IP must remain in Israel, or royalties must be paid if it is moved abroad; the startup must report progress regularly; and the grant must be used exclusively for the approved R&D expenditure. For runway purposes, IIA grants received as cash reduce net burn in the months received, but they should not be assumed as a reliable recurring income stream since each grant cycle requires a separate application and approval process. Factor confirmed approved grants into runway projections, but not pending applications.
At what runway level should an Israeli startup begin fundraising?
The general rule in the Israeli startup ecosystem is to begin a fundraising process when you have 12 to 18 months of runway remaining. This allows sufficient time for the process: initial outreach to investors, due diligence, term sheet negotiations, legal closing, and fund transfer can collectively take 3 to 9 months even in favorable market conditions. Starting with less than 9 months of runway puts the startup in a weak negotiating position because investors can infer the urgency and adjust terms accordingly. The Israeli VC market is relatively concentrated around Jerusalem and Tel Aviv, and global investors with Israel programs add another layer of process time. In periods of market tightening (as seen in 2022 to 2023), fundraising timelines extended to 12 months or more for Series A and later rounds. Pre-seed and seed rounds from Israeli angels and early-stage VCs tend to move faster, sometimes closing in 2 to 4 months.