Burn & Runway Analyzer

---
name: burn-runway-analyzer
description: Use when analyzing burn rate, runway, or building cash scenarios. Triggers on "runway analysis", "burn rate", "how much runway", "fundraise timing", "cash flow scenarios".
---

# Burn & Runway Analyzer

Most founders confuse gross burn with net burn, and confuse "we have 18 months of cash" with "we should start raising in 6 months." This skill produces analysis that doesn't lie to you.

## Required inputs

1. **Cash on hand** — bank balance, not committed-but-not-received
2. **Monthly revenue** — collected, not booked. If subscription, MRR.
3. **Monthly gross costs** — payroll, infra, vendors, rent, everything
4. **Growth assumption** — % MoM revenue growth, with your honest read on confidence
5. **Planned hires / cost increases** — next 6 months
6. **Any one-time costs or inflows** — annual prepays, equipment, etc.

If revenue is "$300k closed but not yet collected" — push back. Use collected cash only. Founders who model with bookings die.

## Output structure

### 1. Today's snapshot
- **Cash**: $X
- **Gross burn** (this month): $Y — total cash out, ignoring revenue
- **Net burn** (this month): $Z — gross burn minus revenue
- **Naive runway**: Cash / Net burn (months) — at current state, no growth

### 2. Burn breakdown
Where the gross burn goes:
- People (% of total)
- Infra & vendors (%)
- Sales & marketing (%)
- Other (%)

Flag anomalies. If S&M is <5% you may be under-investing. If infra is >25%, something's miscalibrated.

### 3. Three scenarios (12-month projection)

**Base case**
- Revenue grows at the founder's stated rate
- Costs grow per planned hires
- Output: months until cash hits $0, months until cash hits "fundraise trigger"

**Upside case**
- Revenue grows 1.5x base assumption
- Costs grow as planned
- What does runway look like? Often counterintuitively, it doesn't extend as much as founders think

**Downside case**
- Revenue grows at 0.5x base, OR flat for 3 months then resumes
- Costs as planned
- This is the case to plan for. If downside breaks the company in <9 months, you're under-capitalized.

### 4. Fundraise timing trigger
Founders should start raising when runway hits **9-12 months**, not 6. Reasons:
- Fundraises take 3-4 months minimum
- Closing on fumes signals weakness, kills valuation
- The "we have 12 months runway" pitch is materially better than "we have 6"

State the date when each scenario hits 9 months of runway. That's the "start raising" date.

### 5. Levers analysis
What changes the picture meaningfully? Test:
- Cut 2 unfilled roles → impact on runway
- Delay $X expense by 6 months → impact
- Sign 1 enterprise deal at $Y ARR → impact
- Raise prices by 10% → impact

Surface the 1-2 levers with biggest impact. Most founders over-index on cost cuts and under-index on price/expansion.

### 6. Health flags
Flag if:
- Gross margin <60% for SaaS
- Net burn > revenue (you're paying to acquire revenue)
- Burn multiple (net burn / net new ARR) > 2 — burning >$2 per $1 new ARR is unhealthy at growth stage
- Single customer >25% of revenue
- Cash <6 months and no fundraise plan

## Anti-patterns

- Modeling with bookings instead of cash — kills companies
- "We'll just raise" as the plan — VC isn't on demand
- Missing one-time costs (annual SaaS renewals, end-of-year payroll true-ups)
- Ignoring CAC payback — burning to acquire revenue that won't pay back is just spending money
- Optimizing for accounting EBITDA at a stage where cash is what matters

## Tone

- Direct. If runway is 4 months and there's no fundraise plan, say "you should be raising right now or making cuts this week."
- Numerate. Every claim has a number behind it.
- Skeptical of upside. Founders are usually right about cost projections and wrong about revenue projections.

## Output format

Markdown with tables for the three scenarios. End with a single bolded paragraph: "Bottom line: [runway in months at base case] — fundraise trigger date is [X]. Risk to plan: [biggest lever or threat]."