Runway math for a Series A startup: the four numbers your investors will ask about
Gross burn, net burn, runway, and the default-alive question — a worked example with the numbers investors actually want in the room.
Founders raising a Series A tend to over-prepare the story slide and under-prepare the four numbers a sharp investor will actually ask about in the first ten minutes. None of these are complicated to calculate. What trips people up is calculating them inconsistently, or not having them ready broken down by scenario, which reads as not having full command of the business.
Gross burn and net burn are not the same number
Gross burn is total monthly operating expense — payroll, rent, software, everything that goes out the door, ignoring revenue entirely. Net burn is gross burn minus revenue: what's actually leaving the bank account net of what's coming in. A company with €180,000 in monthly operating expense and €60,000 in monthly revenue has a gross burn of €180,000 and a net burn of €120,000. Both numbers matter, and conflating them is one of the fastest ways to lose an investor's confidence in a first meeting — gross burn tells you the cost structure, net burn tells you the actual cash trajectory, and a founder should be able to state both without pausing to calculate.
Runway is cash divided by net burn, but only if net burn is stable
Runway in months is straightforward: current cash balance divided by monthly net burn. A company with €1,200,000 in the bank and €120,000 in monthly net burn has 10 months of runway. The number that's easy to get wrong is which net burn figure to divide by — trailing three-month average, or last month's number, or a forward-looking projection. We recommend trailing three-month average as the headline number, specifically because it smooths out one-off months (an annual software renewal, a one-time legal expense) that would otherwise make runway look artificially short or long depending on timing, and then showing the forward projection separately as the number that actually matters for planning.
Default alive or default dead
This framing, popularized by Y Combinator, asks a sharper question than runway alone: if the company changed nothing about its current growth trajectory and raised no further money, would it reach profitability before running out of cash, or not. A company can have 18 months of runway and still be default dead, if its revenue growth rate would need to roughly double to reach breakeven before the cash runs out. Investors ask this because it separates "how much time do you have" from "do you have a plan that closes the gap within that time" — and a founder who can answer it with an actual number, not just a runway figure, is visibly more in control of the business.
A worked example
Take a company with €1,200,000 in cash, €140,000 in monthly gross burn, €35,000 in monthly revenue growing 8% month over month, and net burn currently at €105,000. Runway at the current net burn is roughly 11.4 months. To reach breakeven — revenue equal to gross burn — from €35,000 growing at 8% monthly would take about 19 months, well past the 11.4-month runway. This company is default dead at its current growth rate: it needs to either raise again inside the current runway, increase its growth rate meaningfully, or cut gross burn, and the math makes clear which combination of those actually closes the gap rather than just narrating an intention to "grow faster."
Where this goes wrong in practice
The founders who struggle with this in a board or investor meeting almost never struggle with the arithmetic. They struggle because the four numbers live in different places — burn in the accounting system, growth rate in a sales dashboard, runway in a spreadsheet someone updates before board meetings — and reconciling them under time pressure produces hesitation that reads as not knowing the business as well as they actually do. Ferra Robotics, one of our customers, built exactly this scenario — three hiring plans, each with a different burn and breakeven trajectory — as saved Scenario Studio scenarios ahead of their Series B, specifically so every version of the answer was one click away instead of a spreadsheet rebuild.
“Every scenario question the board had, we answered in the meeting instead of promising a follow-up. That changed how the whole conversation went.”
Scenario Studio's hiring and expense sliders compute exactly this kind of runway math against a live forecast. Try it in the playground with a sample dataset.
Owns the product roadmap and spends most weeks in customer finance meetings. Writes about how finance teams actually work.