Runway
The number of months the company can operate before cash runs out, at the current net burn rate.
Runway is cash on hand divided by net monthly burn: the time the company has left at its current spending. It is the central planning number of a pre-revenue company, and its honesty depends entirely on the burn figure used (net of reliably incoming cash, with one-offs normalized out) and on which future inflows the model dares to count.
The planning discipline runs on scenarios. A base case with committed cash only; a downside where the grant slips a quarter and the hire happens anyway; an extension case showing which costs could stop. The number that matters in each: where the cash-out date lands relative to the next milestone, because runway that ends one month after a demonstrator is not runway, it is a coin flip on a physics schedule.
The raise timing rule follows directly: the next fundraise starts while runway still covers the full process, twelve months is the comfortable software threshold and fifteen is safer on quantum diligence timelines, less than nine puts the company negotiating under visible pressure, and every investor can read a runway from a burn table as fast as the founder can. Extending runway is also not one lever but three: cut burn, add non-dilutive money, or bridge; each has a cost, and the cheapest is usually the one decided earliest.
In quantum the unit that matters is not months, it is milestones: runway is sufficient when it crosses the next value-creating technical proof plus the time to raise on it, and quantum raises take longer than software ones (specialist diligence, narrow investor pool). Non-dilutive money (SR&ED, IRAP, CIR, grants) extends runway materially but arrives in lumpy, lagged instalments, so the honest model tracks cash received, cash committed and cash hoped-for as three different colors.
$1,800,000 in the bank with a net burn of $150,000 per month is 12 months of runway (1,800,000 / 150,000). A committed grant instalment of $300,000 arriving in month four extends it to 14 months, but only once received: a disciplined model counts it as committed, not as cash, until the wire lands.
From definition to decision
Model this in your own round, scenarios, dilution and runway, in the founder workspace.