Runway Planning

Runway planning is insolvency avoidance. Runway modeling requires calculating fully-loaded gross burn and net burn, establishing deterministic Zero Cash Dates (ZCD), evaluating the "Default Alive vs Default Dead" framework, and structuring phased cost-reduction playbooks triggered by explicit cash thresholds.

1. Burn Rate & Runway Formulations

Calculate financial runway with mathematical precision:

• Gross Monthly Burn: $$\text{Gross Burn} = \text{Total Monthly Cash Outflows (Payroll + Hosting + Rent + Marketing + Tooling)}$$
• Net Monthly Burn: $$\text{Net Burn} = \text{Gross Burn} - \text{Total Monthly Cash Collections}$$ Rule: Use cash receipts, not accrual booked revenue, to calculate Net Burn.
• Months of Runway: $$\text{Months of Runway} = \frac{\text{Current Cash Balance} - \text{Restricted/Reserve Buffer}}{\text{Average Net Monthly Burn (Trailing 3 Months)}}$$
• Zero Cash Date (ZCD): The exact calendar date when the operating cash account reaches zero.