How Many Months of Runway Do You Actually Have? (SaaS Founder's Guide)

A founder I know was sitting on what she thought was 14 months of runway. She'd raised a $500k pre-seed, kept burn tight, and felt good about the timeline. At month 8, she started a bridge round "just to be safe." That's when an investor asked to see her burn breakdown.

The problem? She forgot payroll taxes (adds ~18% on top of salaries), annual software renewals (Tools like AWS, Intercom, and Mixpanel that hit once a year), and her own below-market founder salary that was about to come due as a deferred expense.

Real burn was $2,800/month higher than she thought. Real runway: 6 months, not 14. She closed the bridge — but at worse terms than she would have gotten at month 9.

The number in your head is almost always wrong. Here's how to get it right.

What Runway Actually Means

Runway is the number of months until your bank account hits zero. It's the single most important number in your company because it governs every major decision: when to hire, when to raise money, when to cut costs, and when to push for revenue.

Runway has exactly two inputs:

Cash on Hand — the money in your bank accounts right now.

Monthly Burn Rate — the net amount you spend each month.

That's it. Get these two numbers right, and everything else follows.

The Correct Runway Formula

The formula is simple, but most founders use the wrong version of burn.

Runway (months) = Cash on Hand ÷ Net Monthly Burn

Net Burn is Gross Burn minus monthly revenue. Gross Burn is everything you spend. Revenue is everything you earn from subscriptions.

Worked Example

$240,000 ÷ $26,000 = 9.2 months

If you used gross burn instead, you'd get $240,000 ÷ $38,000 = 6.3 months. That's nearly 3 months shorter than reality. It's a common mistake, and it leads founders to panic and raise money too early or from a weak position.

Use net burn. Your revenue buys you time — count it.

The 4 Things Founders Forget in Burn Rate

These four items silently eat months of runway. Most founders miss at least two of them.

1. Payroll Taxes and Benefits

Salaries are never just salaries. Payroll taxes, workers' comp, health insurance, 401k matching — these add 15–20% on top of base comp. If you pay yourself $8,000/month and have one employee at $10,000/month, your real cost is roughly $21,600.

Impact: ~1.5 months of runway on a typical 3-person team over 12 months.

2. Annual Software Subscriptions

AWS, GitHub, Intercom, Mixpanel, Notion, GSuite — these hit your card once a year in big chunks. If you forget to divide them by 12, your burn rate is too low every month except the one they hit.

The fix: Pull all annual subscriptions, total them up, divide by 12, and add to your monthly burn.

Impact: $1,200–$4,000/month forgotten, worth 1–3 months of runway.

3. Founder Salaries

Even if you pay yourself below market — even if you don't pay yourself at all right now — there's a deferred cost. At some point you'll need to take a salary. Most runway models ignore this entirely.

The fix: Model your current actual spend, but keep a separate line for "true burn" that includes market-rate founder compensation for planning purposes.

4. Recurring One-Time Costs

Recruiting fees, legal retainers, annual conference tickets, equipment upgrades. These aren't monthly costs, but they happen every year. If you treat them as one-off and don't amortize them into monthly burn, you run out of money months earlier than expected.

Impact: $500–$2,000/month in hidden burn.

The 3 Runway Scenarios You Should Model

Don't model one number. Model three.

Conservative (P95)

MRR stays flat. Burn stays flat. No surprises. This is your "everything goes wrong" scenario. Make decisions based on this number.

Base Case (P50)

MRR grows 5–8% month over month. Burn grows slightly as you add tools and headcount. This is your likely scenario if things go okay.

Optimistic (P20)

MRR grows 15%+ per month. Burn stays controlled. You hit product-market fit faster than expected. This is your best case.

Here's the hard truth: most founders plan based on the optimistic scenario and are shocked when they hit the conservative one. Fundraising timelines slip. Hiring takes longer than expected. Revenue comes in lumpy.

Fundraise when you have 6 months of runway left in your conservative model, not your optimistic one.

If you wait until you're at 3–4 months, you negotiate from desperation. Good investors know this and will price the round accordingly.

When to Start Fundraising

Fundraising is a full-time job that takes 3–6 months from first meeting to money in the bank. If you wait until you have 4 months of runway, you're already in a time crunch.

The rule of thumb: Start fundraising conversations when you have 9 months of runway left in your conservative model. That gives you 3 months to find the right lead, 3 months to close the round, and 3 months of buffer.

Clean metrics help here. If you walk into a meeting knowing your exact MRR, burn rate, runway by scenario, and churn — without flipping through a spreadsheet — you project confidence. Investors respond to that.

How to Track Runway Automatically

A spreadsheet-based runway model is wrong the moment you close the file. Revenue changes. New subscriptions get paid. Unexpected expenses hit. By the time you update the spreadsheet, you're making decisions on stale data.

AI Finance Ops connects to your Stripe account and pulls in your subscription revenue automatically. Add your burn inputs once, and your runway updates in real time as MRR changes. No manual entry. No stale spreadsheets.

Try our free runway calculator →

Your dashboard shows your runway alongside your MRR, churn, and cash flow — so you always know where you stand.

Know Your Runway Today

If you don't know your exact runway right now, stop what you're doing and find out. Pull your bank balance, calculate your real burn (include those four forgotten items), and run the three scenarios. It's the most important number in your company.

Calculate my runway — free