Runway planning when the market is slow

When funding slows down, the founders who survive are the ones who adjusted early. Not the ones who panicked and cut everything, and not the ones who kept spending like the round was coming next month. The ones in between — the ones who planned.

Here's how we think about runway when the market gets tight.

Know your real number

Runway isn't revenue minus costs divided by cash. It's more nuanced than that. You need to account for payment delays, seasonal dips, one-off expenses, and the fact that cutting costs takes time (notice periods, contracts, severance). Your real runway is almost always shorter than the spreadsheet says. We tell founders to assume it's 20% shorter than their base case.

Cut once, cut deep enough

The worst thing you can do is make small cuts every month for six months. It destroys morale and it doesn't actually fix the problem. If you need to reduce burn, figure out your target number, make the changes in one go, and give your team a clear picture of where things stand. People can handle hard news. They can't handle uncertainty that drags on.

Separate survival spending from growth spending

Some costs keep the lights on: core engineering, existing customer support, infrastructure. Other costs are bets on future growth: new hires, marketing experiments, that second product line. In a slow market, you protect the first category and get very honest about the second. Every growth bet should have a clear thesis and a timeline. If it's not working in three months, stop.

Revenue is a runway strategy too

Founders in cost-cutting mode sometimes forget that revenue extends runway just as well as savings. Can you accelerate a deal? Offer annual prepayment discounts? Launch a smaller product faster? We've seen companies add 3–6 months of runway through revenue moves that didn't require a single cut.

Talk to your investors early

If you have existing investors and things are getting tight, tell them before it's urgent. Most investors would rather put in a small bridge early than watch a company run out of cash. But they need time to evaluate and decide. Surprising them with a two-month runway is the worst possible position to be in.

For more on how to handle those investor conversations when a new round is on the table, see our post on what to look for in a term sheet.

The goal isn't to survive forever

The point of runway planning isn't to exist as long as possible on as little as possible. It's to buy yourself enough time to hit the milestones that make the next round possible — or to reach profitability. Every decision should ladder back to that.