Burn Rate and Runway Planner

Turns the operating plan into an honest cash narrative - with decision triggers, not just a runway number.

What this skill is

A startup Chief Financial Officer (CFO) instrument that decomposes burn, builds three operating scenarios (base, conservative, stretch), and lays out an explicit lever stack ranked by return per unit of strategic damage. It includes a 13-week rolling cash forecast for tactical liquidity management and a fundraise-trigger calendar tied to runway.

What it solves

• Reporting runway as a single number with no scenario range
• Treating investor commitments as cash before they're wired
• Recommending layoffs as the first lever (instead of last)
• Hiding lumpy disbursements (payroll, tax, insurance) inside an average burn
• No explicit triggers for when fundraising or cost-cutting starts

When to invoke

• Quarterly board preparation for any pre-profitability company
• Pre-fundraise modeling (Series A through pre-Initial Public Offering (IPO))
• Recession or downside scenario planning
• Layoff versus hiring-freeze versus spend-cut deliberation
• 13-week tactical cash management when liquidity is tight

Phase 1: Baseline cash position

• Cash plus equivalents as of date
• Available debt capacity (undrawn lines, available Simple Agreement for Future Equity (SAFE) notes or convertible notes)
• Restricted cash - exclude from runway math
• Net Accounts Receivable (AR) plus Accounts Payable (AP) position (working capital)

Define:

• Gross burn = total monthly cash out
• Net burn = cash out − cash in (revenue plus expansion)
• Cash-zero date at current net burn

Phase 2: Burn decomposition

Break monthly cash out by category as percent of total so the conversation moves to mix, not absolute dollars:

Flag any line growing more than 10% month-over-month and the top 3 categories.

Phase 3: Default-alive versus default-dead

Apply the Paul Graham framing:

• Default alive: at current growth, will revenue exceed expenses before cash runs out?
• Default dead: it won't - fundraise or cost cuts required

Compute:

• Revenue month-over-month growth (trailing 6 months, trimmed mean)
• Months until revenue ≥ gross burn at current growth
• Cumulative cash needed to reach break-even

Present the default-alive curve: cash balance over time at current growth.

Phase 4: Scenario planning

Always build three scenarios:

Base - current plan, current sales productivity, current churn Conservative - hiring frozen, sales productivity −20%, churn +25%, no new round Stretch - hiring +30%, sales productivity +15%, new round closes in 4 months

Build the levers table:

Stack levers by return per unit of strategic damage - layoffs are rarely the first move if other levers exist.

Phase 5: 13-week rolling forecast

Inputs: Accounts Receivable (AR) aging, Accounts Payable (AP) aging, payroll calendar, tax estimates, insurance, lease. Flag any week where ending cash is less than 30 days of operating expense.

Phase 6: Fundraise trigger calendar

Tie each trigger to a calendar date based on current burn.

Output

• Cash position memo: balance, gross burn, net burn, runway
• Default-alive verdict with reasoning
• Three scenarios with quantified runway under each
• Recommended levers in priority order with dollar and strategic-cost impact
• Fundraise calendar with trigger dates
• 13-week tactical forecast with liquidity warnings flagged
• 3-5 leading indicators that would shift the plan

Operating rules

Always

• Separate gross burn from net burn
• Use trimmed-mean growth, not last-month
• Build all three scenarios
• Quantify each lever in dollars and strategic cost
• Set fundraise triggers as calendar dates
• Stress-test with lumpy payroll, tax, and insurance disbursements

Never

• Report runway as one number
• Assume revenue grows linearly from one good month
• Treat investor commitments as cash until wired
• Recommend layoffs before exhausting cheaper levers
• Mix restricted cash into runway