What is startup runway?
Runway is the number of months a startup can operate before running out of cash — assuming current burn rate and revenue remain constant. It's the most important survival metric for early-stage startups. Most investors want to see 12–18 months of runway before investing.
What's the difference between gross burn and net burn?
Gross burn is your total monthly expenditure — all costs before any revenue. Net burn is gross burn minus revenue. If you spend ₦2M/month and earn ₦800k/month, your net burn is ₦1.2M/month. Runway is calculated using net burn.
How do African startups typically extend runway?
Common strategies include: negotiating deferred salaries with equity compensation, moving to cheaper co-working spaces, pausing non-critical marketing spend, renegotiating vendor contracts, pursuing revenue-based financing (common in Nigeria via Capiblock or Carbon), or raising a bridge round from angels in the ecosystem.
What runway should I target before raising funding?
Aim for at least 18 months post-raise. Fundraising in Africa typically takes 3–9 months, so if you have less than 9 months of runway, start fundraising now. Lagos, Nairobi and Cape Town-based founders benefit from being close to investor networks.