Cash runway: how to build a 13-week forecast your board will trust.

Every board meeting at an early-stage company circles back to the same question: how long until we run out of money? Everything else, hiring, spend, the timing of the next raise, hangs off the answer. A 13-week cash flow forecast answers it with something a board can trust, which is more than a number. It is a number with its assumptions shown.

Runway is the number that matters

Runway is how many months of cash you have left at your current burn. The math is simple: cash on hand divided by net monthly burn (what you spend minus what you bring in). If you hold CAD 600,000 and burn CAD 100,000 a month, you have six months of runway.

The simplicity hides the trap. Both inputs move. Burn is lumpy, revenue is uncertain, and a single annual bill can swing a month. A static runway number from a spreadsheet last touched in January is how companies get surprised. The 13-week forecast exists to keep the number honest.

Why 13 weeks

Thirteen weeks is one quarter, and it is the sweet spot for cash forecasting. Long enough to see the next raise, a big renewal, or a hiring wave coming. Short enough that you can forecast week by week with real accuracy instead of guessing at monthly averages. Cash problems show up in weeks, not months, and a weekly view catches the Friday payroll you cannot make three weeks out while there is still time to act.

How to build the forecast

The forecast is a simple grid: 13 columns, one per week, and three blocks of rows.

1. Start with cash. The opening balance of week one is your actual bank balance today. Every week after, the opening balance is the prior week's closing balance.
2. Lay in the inflows, by week. Customer payments, expected by the week you actually expect them, not the week you invoiced. Add any financing, tax refunds (including an SR&ED refund if one is coming), and other real cash in.
3. Lay in the outflows, by week. Payroll on the weeks it runs. Rent, software, and recurring bills on their due dates. Known one-offs like a tax installment or an annual renewal on the right week. Lumpy is the point; a monthly average would hide the week you cannot cover.

Each week, closing cash equals opening plus inflows minus outflows. The line across the bottom is your runway, week by week, and the week it crosses zero is the one that matters.

The assumptions to call out

A forecast a board trusts is one that shows its work. State the assumptions in plain language next to the model:

• Which customer payments are signed versus hoped for.
• What you assumed about churn and new sales.
• Which costs are committed versus discretionary.
• Whether an expected refund or financing is in the numbers, and how confident you are.

When the assumptions are visible, the conversation moves from "do we believe this number" to "do we believe these assumptions," which is the conversation worth having.

Reading burn and runway

Two numbers fall out of the forecast. Burn is the average net cash leaving each week or month. Runway is how long the cash lasts at that burn. Watch the trend more than the snapshot: burn creeping up while revenue is flat shortens runway faster than any single big expense, and it is the pattern boards most want flagged early.

Keeping it honest

A forecast is only useful if it stays current. Update it weekly against what actually happened, and compare last week's forecast to the real result. Where they diverge, fix the assumption. Over a few weeks the model gets sharp, and the runway number stops being a guess and becomes something you, and your board, can act on.