SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/founder-runway-formula

How do founders estimate cash runway in months?

Divide usable cash by monthly net burn.

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  1. Burn divided by cash
  2. Revenue plus expenses
  3. Cash divided by monthly burn ✔

Why: Runway estimates how many months current cash can support the present burn rate. It is a planning estimate because both cash receipts and spending can change.

Huh, didn't know that: At $240,000 cash and $20,000 monthly burn, estimated runway is 12 months.

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Why did cash visit the airport? It wanted a longer runway.
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References

Answer: Cash divided by monthly burn. Runway estimates how many months current cash can support the present burn rate. It is a planning estimate because both cash receipts and spending can change.

  1. Bluebird bio presentation filed with the SEC www.sec.gov/Archives/edgar/data/1293971/000129397123000024/ex_991xbluexcorp.htm
    Cash Runway is calculated using the cash balance / net burn rate
    Checked 2026-10-11.

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