Runway is the number of months a company can keep operating before its cash runs out, calculated as cash on hand divided by monthly net burn.
A company with $480,000 in the bank and $60,000 in monthly burn has 8 months of runway. Under 6 months generally reads as urgent to investors; over 12 is considered healthy, though the right number depends on stage and how easy the next raise is likely to be.
The standard advice is to start raising with 6 months of runway still on the clock, not zero, since a round that starts against a deadline negotiates from a weaker position than one that starts with room to spare. Runway is also a moving target, not a one-time calculation: burn rate changes as a company hires or cuts costs, so it's worth rechecking regularly, not just before a raise.
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