Out of Cash Date

Date created: Feb 14, 2019  •   Last updated: Sep 27, 2019

What is Out of Cash Date?

Out of Cash Date gives you a rough estimate of when you will be out of cash. This metric is most often expressed as the number of months before Cash Out. This is a useful metric for CEOs and CFOs who are managing companies that are not profitable yet.

Alternate names: Cash Runway, Zero Cash Date

Formula

ƒ (Cash) / (Net Burn)

Out of Cash Date

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What is a good Out of Cash Date benchmark?

For venture backed, growth oriented companies, Out of Cash Date is often between 9 and 24 months.

More about this metric

Out of Cash Date is a simple predictive metric that should be top of mind for any CEO or CFO in charge of a company that is not cash flow positive. A business needs to fundraise, exit, or become profitable before the Out of Cash Date. The Out of Cash Date is a rough estimate, as it assumes Net Burn will not change in the future, but it’s still a useful gauge to monitor.

Especially if you are a venture backed company, if your Cash Out Date is too far in the future, you may not be using your capital aggressively enough to grow the business. However, anytime your Out of Cash Date dips below 12 months, you should should either be in fundraising mode, or be looking at ways to conserve cash.

Recommended resources related to Out of Cash Date

Here is a short article from Geckoboard about Cash Runway.