If you're raising investment today, should you aim for 18 months of runway, 24 months, or more?

Raising too little forces you back into the market in a hurry and from a weak position. Raising too much, or on bad terms, costs you control. That’s why runway is one of the most important decisions to make early on.

Starting with your own resources (also called bootstrapping) keeps you in control.

If you need an investor, here’s a practical way to decide how much runway to raise: count how many months remain until the next milestone that will make the company clearly more valuable (revenue, customers, a finished product), then add about six months of buffer for delays. Test that timeline in a pessimistic scenario; if the numbers don’t work, you’re short on cash. If your calculation comes out between 18 and 24 months, go with 24: fundraising often takes longer than planned these days.

More money gives you room to get through a rough patch, but a large round with suffocating terms creates another problem. When comparing offers from angel investors (people who invest their own money in early-stage companies) or venture capital funds (firms that invest other people’s money in companies that could grow quickly), remember that where the money comes from, what investors expect from it, and how much control you keep matter as much as the amount on offer.

What runway means

Runway is how many months the company can keep going with the money it has. The basic calculation is cash divided by monthly net burn (what goes out minus what comes in). If you have 1 million in cash and net burn is 50,000 per month, you have 20 months of runway. These numbers are just an example.

Runway doesn’t have to last forever. It needs to get the company to a point where raising the next round is easier, whether the money comes from customers or investors.

Set the milestone first

The timeline comes from the milestone, not the other way around. Choose a milestone that an investor or customer will recognize as real progress: steady recurring revenue, a certain number of paying customers, or a product in use without you standing next to it. A vague goal like "grow" doesn’t give you anything to calculate.

Then estimate how many months it will take to get there and add a buffer. Remember that a new fundraise also takes months, from the first conversation to the money landing in your account.

The pessimistic scenario

Recalculate assuming sales come in more slowly, a contract is delayed, and a cost goes up. If the money runs out before you reach the milestone in that scenario, you’re short on cash. You have three options: raise more, cut costs, or choose a closer milestone.

This calculation also shows when to act. Start talking to investors while you still have several months of runway, not when you have only a few weeks left.

Start with your own resources

Bootstrapping (growing with your own cash and customer revenue) is slower, but every month you validate the business without an investor makes the company more valuable. When you raise money, you’ll negotiate from a stronger position and give up a smaller stake. Outside capital makes sense when speed is critical and the money buys something that revenue can’t fund in time.

1. Set a concrete, verifiable milestone that will make the company more valuable.
2. Calculate actual monthly net burn based on the past few months.
3. Estimate the months until the milestone in both the likely and pessimistic scenarios.
4. Add a buffer of about six months and the time needed for the next fundraise.
5. Compare the result with what you can do using your own resources.
6. Evaluate each investor’s terms, not just the amount offered.

• Choosing 18 or 24 months out of habit, without a milestone behind the choice.
• Calculating only the best-case scenario, which almost never happens.
• Starting to raise with little runway and negotiating in a hurry.
• Taking the largest check without reading the terms that come with it.

• Runway = months until the next milestone + a buffer of ~6 months.
• Test the timeline against a pessimistic scenario.
• Evaluate runway and terms together.

• Projectempresa-de-iaCost-per-task calculator: helps estimate monthly spending before deciding how much to raise.