Glossary
Runway
How many months you can keep going before the money runs out.
Cash in the bank divided by monthly net burn. Six months of runway means that on today's spending, in six months there is nothing left.
Raising takes longer than founders expect, and the process itself is a distraction that often slows the business while it runs. Starting a raise with under six months left means negotiating from weakness, and experienced investors can see it in the terms you accept.
Runway is also the number that makes a currency question real for Nigerian companies: costs in naira and a raise in dollars means your runway moves with the exchange rate whether or not anything in the business changes.
Related terms
- Burn rate — How much more money leaves the company each month than comes in.
- Bridge round — A smaller raise to reach a milestone before the next real round.
Read next
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- Raising in naira or in dollarsA Nigerian company usually earns in naira, spends partly in dollars, and raises from investors who think in dollars. Eve…
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