Sequoia's Ravi Gupta and Sonya Huang define runway as net cash, meaning cash minus drawn venture debt, divided by monthly burn, and argue most founders need more of it than they assume. They introduce a three bucket framework: under 12 months of runway is existential, 12 months but short of the metrics needed for a flat round is critically important, and enough runway to hit a milestone means stay the course. Using an example of a company that last raised at a billion dollar valuation with $5-10M ARR needing $75-100M ARR to raise flat, they estimate reaching that goal could take three to four years, so founders should hold that runway plus a further 12 months before running out of cash.

This is a rare look at the private, direct advice a top tier venture firm actually gave its own portfolio founders during a funding downturn, rather than a public facing thought leadership piece written for a wider audience. The net cash calculation, which excludes venture debt from the runway number, is a specific correction to a common founder mistake that overstates how much time a company actually has left. The recommendation to hold your time-to-milestone estimate plus 12 months gives founders and CFOs a concrete rule of thumb for when to start a raise, rather than a vague sense of urgency. The bucket framework also gives boards a shared, low jargon way to categorize a company's cash urgency during planning conversations.