17 September 2020 | Blog

Wanted Dead or Alive: The Importance of Runway

In business, you’re either growing or dying. A startup knows which path it is on by their runway.  Your runway refers to the number of months your company can comfortably operate before it runs out of money. For an early-stage startup, calculating your runway is crucial to success. 

A sad reality in the startup world is that many companies fail because of poor financial planning.  This is because most founders have inaccurate timelines of their cash flows, which results in an abrupt ending to their business. 

Founders and CEOs are already busy with making business decisions for their company.  Finmark is specifically created to take that pressure off of founders and help them organize their finances to make more informed decisions because knowledge is power.  Founders can’t be bothered with tedious calculations and extra math.  They need to be thinking about things that will make them cash flow positive such as hiring and revenue.  

There is a concept in the business world known as default dead or alive.  The idea of default dead or alive can be asked with the question of “do you turn cash-flow positive before your runway runs out?”  

To be default alive means that a startup is on track to be profitable with its current resources.  To be default dead means a startup does not have enough revenues to cover expenses, which will immensely hurt your company.   

Finmark’s model allows you quick access to your company’s financials to prevent defaulting dead.  As a founder, you should be confident that your financial model is an accurate representation of your use of resources.  Poor financial planning should not be the reason for failure.
Finmark is simple and easy to understand. There is no need to toil with spreadsheets; we take all of the guesswork out of building a strong financial model. Want to help us get ready for prime time? Sign up for the private beta and we’ll email you with an invite code in the coming weeks. Click here to sign up.

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Historically financial modeling has been hard, complicated, and inaccurate. But financials are the lifeblood of any company. They’re too important to be ignored or outsourced. They should be a core part of every founder’s job. This doesn’t have to be scary. And you don’t have to do it alone. The Finmark Blog is here to educate founders on key financial metrics, startup best practices, and everything else to give you the confidence to drive your business forward.

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