How many months of runway is enough once you have revenue?

Why the 18-month rule does not fit a company with revenue

The rule comes from the day a round closes. J.P. Morgan's guide for startups puts it plainly: "For many years, the rule of thumb was to raise enough capital to last 18 to 24 months." The same guide says that in a tighter market a runway of 24 to 36 months is now recommended more often, and that investors look more cautiously at startups with less than six months of runway.

Read that last point with six to eight months in the bank. You're close to the line investors read with extra care, and a raise you start today will probably close below it.

The calendar between rounds has also stretched. Carta's review of 2025, published in February 2026, found that the median startup closing a Series A had waited about 2.1 years since its seed round, up from 1.5 years five years earlier. Between Series A and Series B the median gap was 2.5 years, against 1.8 years in 2020.

The same report counted 29% of seed and Series A deals on Carta in 2025 as bridge rounds, which Carta defines as any round raised after the first one in a series. A bridge is a planning tool, and it only helps when you know what it has to buy.

So the question worth answering is what your months will do.

Step 1: Find out whether you are default alive

Paul Graham asked the question in 2015, in an essay that still works because it needs only numbers you already have: "Assuming their expenses remain constant and their revenue growth is what it has been over the last several months, do they make it to profitability on the money they have left?" If yes, the company is default alive. If no, it is default dead. Graham's warning in the same essay is that founders assume raising more money will be easy, and the more they depend on that, the less true it becomes.

Fill in four lines, with every co-founder in the room:

Simple runway is cash divided by net burn: 600,000 divided by 70,000 is about 8.6 months. That number hides the thing that decides your next year, because revenue is moving and the burn moves with it. So run the same four lines month by month, letting revenue grow and taking each month's gap out of the cash.

In the example, the answer turns on two dials, growth and costs:

• At 4% monthly growth, revenue never catches the 130,000 of costs in time. The cash runs out during month 11. The company is default dead.
• At 6% monthly growth, revenue passes costs in month 15 with about 41,000 EUR left. Default alive, with almost no margin.
• At 4% growth with costs cut to 115,000 a month, revenue passes costs in month 18 with about 67,000 EUR left. Default alive, and the cut is the reason.

The figures are an illustration, rounded to the nearest thousand, so use your own. If you want the same test explained a second way, Mercury's blog explains it.

Step 2: Write plan B and put a date on it

Graham's advice from the same essay is the part founders skip: "you should know (as in write down) precisely what you'll need to do to survive if you can't raise more money, and precisely when you'll have to switch to plan B if plan A isn't working."

On the worksheet, plan B for a company with revenue is the cost line. Which costs go, in what order, and what the revenue line needs to look like for the company to become default alive without new money. The date matters as much as the list. It's the day the cash left equals what plan B needs to work, and it should be in the calendar of every co-⁠founder.

Before you agree on the date, ask each co-founder separately how many months of cash the company has and what happens on that day. If the answers differ, that's the first conversation to have, and it's better had before an investor asks the same question. We built our startup assessment on the same idea: each co-founder answers on their own, and the report sets the answers side by side, so you see where you agree and where you do not.

Step 3: Count the raise backwards from the money

Raising takes longer than the meetings. Graham's line from 2013 holds for any founder with a product to run: "When you start fundraising, everything else grinds to a halt." Plan for that cost as well as for the time.

Work backwards from the day you need money in the bank:

1. Take your plan B date from step 2. That is the latest day the money can arrive without plan B starting.
2. Subtract the time you expect from first meeting to money in the bank. Not sure how long that is? Ask two investors you trust how long their last deals took from first call to wire.
3. Check the months in between against the calendar. In our experience, first meetings with European investors are hard to get from late November to the first week of January, so a process that starts in that window waits for January. We wrote about planning a raise around that gap in Founders Shift.
4. If the answer lands before today, start plan B now and raise alongside it.

When you do start, run the meetings in parallel. Graham's reason in the same essay is the one that matters on a short clock: "if you only talk to one investor at a time, they don't have the pressure of other investors to make them act."

The order the worksheet follows

With six to eight months and revenue, the worksheet runs in this order:

1. This week, run the default alive test on real numbers with every co-⁠founder present.
2. Write plan B and its date, and agree on both.
3. If the company is default alive, decide whether to raise at all. And if you do raise, you raise from strength, so you can walk away from a bad term sheet.
4. If it is default dead, plan B starts on its date whatever the investor meetings say. A bridge from your existing investors can buy time, so size it to cover the result the next lead investor will pay for and the raise that follows.

What the company does with those months matters more than the number on the runway line.

Work through it with us

TBHM Growth is a four-week programme for founders whose company has revenue, paying customers and six to eight months of runway. Ten startups per cohort spend the four weeks deciding where the company goes next: its position, the founding team, the fundamentals of fundraising and the route. It costs 1,200 EUR per company, co-founders included, and it takes no equity. See if TBHM Growth fits your company.

If you want to talk your own numbers through first, the Brutally Honest Mentor AI gives you 20 minutes free.