Startup Runway Calculator

What does "Default Alive" mean?

Coined by Y Combinator's Paul Graham, a startup is Default Alive if, assuming expenses remain constant and revenue grows at its current rate, they will reach profitability before running out of money.

If a startup will run out of cash before becoming profitable, they are Default Dead. Knowing which state you are in determines whether you need to immediately cut costs, raise venture capital, or continue business as usual.

How do you calculate startup runway?

Startup runway is calculated by dividing your total cash reserves by your net burn rate (monthly expenses minus monthly revenue).

For example, if you have $50,000 in the bank, and you are losing $5,000 per month (net burn), your runway is exactly 10 months. You must either raise money, cut expenses, or increase revenue before those 10 months are up.

How to use the Runway Calculator

Run a quick financial health check on your startup:

1. Enter Cash Reserves: Input the exact amount of money you have sitting in your corporate bank account.
2. Enter Monthly Expenses: Input your Gross Burn (servers, SaaS tools, salaries, marketing).
3. Enter Monthly Revenue: Input your MRR (Monthly Recurring Revenue). The tool will instantly calculate your net burn and exact date of death.

Gross Burn vs Net Burn

Gross Burn is the total amount of money your company spends each month. If you spend $10,000 on salaries and AWS, your Gross Burn is $10k.

Net Burn is your Gross Burn minus your revenue. If you make $4,000 a month but spend $10,000, your Net Burn is $6,000. Investors and founders care primarily about Net Burn, as it determines how fast your bank account is draining.