Last updated: Jul 03, 2026
Out of Cash Date is the projected point in time when a company's cash reserves will reach zero, calculated by dividing current cash by monthly net burn rate. Expressed as months of runway remaining, it is a critical planning metric for CEOs and CFOs managing companies that are not yet cash flow positive.
Alternate names: Cash Runway, Zero Cash DateA SaaS startup has $1,800,000 in the bank and a net burn rate of $150,000 per month.
Formula: Cash / Net Burn
$1,800,000 / $150,000 = 12 months
The company has approximately 12 months of runway. If it cannot reach profitability or close a funding round within that window, it will run out of cash.
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For venture-backed, growth-oriented companies, Out of Cash Date typically falls between 12 and 24 months. Runway below 12 months is considered a critical threshold that should trigger active fundraising. Runway beyond 24 months may indicate underdeployment of capital. (Source: general venture capital convention; Y Combinator, Sequoia Capital guidance, widely cited in startup finance literature.)
Use a summary chart to visualize your Out of Cash Date and compare it to a previous time period.
Out of Cash Date
Out of Cash Date is a simple predictive metric that should be top of mind for any CEO or CFO running a company that is not cash flow positive. A business must fundraise, reach a liquidity event, or become profitable before this date arrives.
The metric is a rough estimate — it assumes Net Burn will not change over time. In practice, burn rates shift as you hire, launch campaigns, or cut costs. That limitation does not diminish its value; it just means you should recalculate it regularly, ideally monthly.
The right amount of runway depends on your stage, business model, and growth strategy. That said, a few thresholds are widely used as planning anchors.
Below 12 months: This is the critical zone. If your Out of Cash Date is less than 12 months away, you should already be in active fundraising mode or taking concrete steps to reduce burn. Fundraising takes longer than most founders expect — often six months or more from first meeting to close.
12–18 months: This is a workable window, but not a comfortable one. Use this time to build momentum, strengthen your metrics, and begin investor conversations before urgency sets in.
Beyond 24 months: Long runway can be a sign of strong fundraising, but it can also indicate under-investment in growth. For venture-backed companies, sitting on excess capital without deploying it aggressively may signal a missed opportunity to scale.
Assuming burn is static: Net Burn changes constantly. A single large hire, a lost contract, or an unexpected expense can compress your runway significantly. Recalculate monthly and model scenarios where burn increases by 10–20%.
Confusing gross and net burn: Gross Burn is total cash spent. Net Burn subtracts revenue. Using gross burn overstates the urgency; using net burn without accounting for revenue volatility can understate it. Be consistent and transparent about which figure you are using.
Starting fundraising too late: Many founders wait until runway drops below six months before approaching investors. By then, the power dynamic has shifted and deal terms often reflect that desperation. Treat 12 months as your fundraising trigger, not your warning sign.
Ignoring seasonality: If your revenue is seasonal, a flat burn assumption will mislead you. Model your Out of Cash Date against your lowest-revenue months to stress-test the projection.
Recalculate monthly using your most recent cash balance and a trailing three-month average of net burn.
Model multiple scenarios: base case, upside, and downside. Know what happens to your runway if a key customer churns or hiring accelerates.
Share it with your board at every meeting. Transparency here builds trust and gives your investors time to help if needed.
Set internal alerts at 18 months and 12 months so action is triggered well before the situation becomes urgent.
Out of Cash Date is the projected point in time when a company's cash reserves will reach zero, based on its current cash balance and monthly net burn rate. It is expressed as months of runway remaining.
Divide your current cash balance by your monthly net burn rate. The result is the number of months of runway you have before cash reaches zero.
For venture-backed companies, 12 to 24 months of runway is a common target. Below 12 months is considered critical and should trigger fundraising activity. Beyond 24 months may indicate underdeployment of capital.
They measure the same thing. Cash Runway is the number of months of cash remaining; Out of Cash Date converts that number into a specific calendar date. Both use the same formula: Cash divided by Net Burn.
