Runway
The number of months you can continue operating at your current net burn before running out of cash.
Why it matters
It determines your negotiating position more than any pitch does. Investors can estimate your runway, and they price accordingly.
A worked example
$1.8M in the bank with $150K of net monthly burn is 12 months of runway.
What is typical
Start raising with nine to twelve months left, because a raise takes three to six months. Below six months your leverage falls sharply.
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Related terms
Bridge round
Interim financing between priced rounds, usually intended to reach a milestone that unlocks the next round.
Read more →Run your raise on this
VCTerminal models these terms on your real cap table, so you can see what a term sheet pays you before you sign it.
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