Knowledge base
How much runway do I really have? How to calculate it honestly
1 September 2026
Almost every founder knows the number roughly: “we’ve got about ten months left.” But “about” is exactly the problem. Runway is the most important numerical truth about your business, and yet it’s often estimated too optimistically.
The simple formula, and why it misleads
The basics are well known: runway = cash in the bank ÷ net burn per month. If you have €200,000 and burn €25,000 a month, your runway is eight months.
The trouble sits in two assumptions. First: your burn is rarely constant. You hire people, a big contract falls away, or an annual invoice lands all at once. Second: “cash in the bank” is not the same as “cash you’re free to spend”, because there’s still tax, holiday pay and suppliers set against it.
Work with a cashflow forecast, not an average
An honest runway comes from a 13-week cashflow forecast: week by week, what comes in and what goes out. That way you see the dips a monthly average hides, for example the quarter where you have to pay your VAT and a large supplier at the same time.
For the longer term you do the same thing per month, with scenarios:
- Base case: your current plan.
- Downside: revenue comes in 30% short, or a deal slips a quarter.
- Upside with costs: you grow, but then your costs rise too (people, infra).
The runway that counts is usually your downside. That’s what you steer on.
When should you act?
Rule of thumb: start your next funding round while you still have six to nine months of runway, not three. A round takes time, and investors can smell haste. Without a buffer you negotiate from a position of weakness.
The same goes for cost decisions. Want to hire three people? First work out what that does to your runway in your downside scenario, not in your base case.
The common mistakes
- Calculating runway based on one good month.
- Forgetting tax and holiday pay as future outgoings.
- Making decisions without running your runway again.
- Only looking at funding when you can see the bottom.
How we do this at Confidato
As your fractional CFO we set up a cashflow forecast that shows your real runway, scenarios included, and together we decide the moment you need to act. That way you make decisions about hiring, investing and funding based on numbers that hold up, not on gut feeling.