Short answer
Runway is the number of months a company can operate before it runs out of cash: cash divided by monthly burn. You extend it by spending less, collecting cash sooner, or adding cash. Collecting sooner includes borrowing against R&D tax credits and grants you're owed; adding cash includes venture debt and equity. The earlier you act, the more options you have.
Key facts
- Runway = cash ÷ net monthly burn
- Aim for 18–24 months after a round
- Start fundraising with at least 9–12 months left
- Debt is easiest to raise when runway is healthy
Three ways to extend runway
| Lever | Examples | Trade-off |
|---|---|---|
| Spend less | Hiring freeze, renegotiate suppliers, cut tools | Can slow growth |
| Collect sooner | Shorter customer terms, borrow against R&D credits or grants | Cost of finance |
| Add cash | Venture debt, equity, revenue-based finance | Repayment or dilution |
Bring forward money you're owed
If you're due an R&D tax credit or grant payments, borrowing against them can add months of runway without dilution. See how much you can borrow against an R&D claim and grants paid in arrears.
Add runway with venture debt
Raised alongside or soon after equity, venture debt can add 6–12 months of runway for a fraction of the dilution. It works best when runway is already healthy. See when to raise venture debt.
Don't leave it too late
With under six months of cash, every option gets harder and more expensive. Review runway monthly and set a trigger point to act.
Related: Venture Debt →
Related questions
How much runway should a startup have?
Most investors suggest 18–24 months after a round.
Is it bad to raise debt with short runway?
It is harder and riskier: repayments reduce cash further if the next round is delayed.