All terms
Investment & FinanceStartup Lifecycle
Runway
Months of operating cash a company has before running out.
Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026
Definition
Runway is cash on hand divided by net monthly burn. It tells founders and boards how long the company can operate before needing more capital or reaching profitability.What this means in practice
MedTech investors typically expect 18–24 months of runway after a round to reach the next value-creating milestone (e.g., trial readout, regulatory clearance). Burning through a round in 12 months without a milestone is a red flag. Common pitfalls
- •Confusing gross burn with net burn; revenue-stage companies should track both.
- •Not stress-testing runway against trial enrollment delays or FDA RTA letters.
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409A Valuation
An independent fair-market-value appraisal of common stock used to set tax-compliant strike prices for employee stock options.
Investment & Finance
Anti-Dilution Protection
Adjustment that protects investors if the company raises a future round at a lower price.
Investment & Finance
Bridge Round
Interim financing between priced rounds, usually convertible.
Investment & Finance
Burn Rate and Runway
Monthly net cash consumption (burn) and months of cash remaining (runway).
Primary references
3 sourcesLink health: 3 verified· last checked 2026-06-20
NVCA·1SVB·1PitchBook·1
- 1
NVCA Model DocumentsVerifiedNVCAnvca.org
- 2
Silicon Valley Bank - Healthcare ReportsVerifiedSVBsvb.com
- 3
PitchBook - MedTech CoverageVerifiedPitchBookpitchbook.com
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