simply, we can’t go bankrupt if we make more money than we spend. Beyond that, responsible growth and planning (and so the success of our community) are not possible without knowing how much money is left after expenses to reinvest in our org. You’ll have used funding cash to build the community in the early stages, with the aim to reach positive cash flow before the money runs out. Sometimes called “cash runway,” this metric tells you how long the money will last at your current burn rate. We should ideally target having twelve months or more of runaway at any given time.

particularly in early seed rounds. That way, we can take the hit of an unexpected expense, a market downturn, or a complication with our service without feeling the heat of a sudden burn rate increase