Table of Contents

• 👉🏻 Introduction

• 💰 Deals done this week

• Today's Deep Dive: How Founders Should Think About …

• 🤖 AI in fundraising

• Interesting Things I Read

• Founders’ Guidelines

  • About Raise Like a Pro

👉🏻 Introduction

One of the most common terms you hear banded around by both founders and investors is runway. Most people do have a vague understanding of what runway is, but I think they tend to look at it as a single dimension of a mixture of metaphors—where you’re flying the plane as you're building it, and the end of the runway is fast approaching.

If you haven't reached terminal velocity (which is the point at which, if you do not have enough speed to generate lift and take off, you will hit the end of that runway), then the business is dead. But it's so much more nuanced than that, and a lot of founders simply do not think too deeply or examine it in the right light.

So today I'm going to deep dive into what runway means, borrowing from a guide that Sequoia Capital wrote and digging deep into my relatively limited accounting knowledge from my school and university days.

Read the full article below on how founders need to think about runway.

💰 Deals done this week

• Foundation EGI, a Los Altos, CA-based creator of the world's first Engineering General Intelligence (EGI) platform, landed $23M in oversubscribed Series A funding, raising over $30M total. (Read)

• iCapital, a New York, NY-based global fintech company shaping the future of investing, announced it has raised over $820M with the completion of its latest financing round. (Read)

• Airalo, a Lewes, DE-based (with operational base in Singapore) first and largest eSIM provider, received a $220M investment led by new investor, CVC. (Read)

• Varda Space Industries, an El Segundo, CA-based microgravity-enabled life sciences company, scooped up a $187M Series C round, bringing the total capital raised to $329M. (Read)

• MaintainX, a San Francisco, CA-based leading maintenance and asset management platform, secured $150M in Series D funding. (Read)

Today's Deep Dive: How Founders Should Think About Runway

Founders quite rightly talk a lot about runway but often view simply as a critical point they’re all too quickly heading towards. But VCs want more than that. Sequoia Capital shared a framework on how founders should approach the runway. This write-up will discuss:

Runway Reality: What is your runway right now? How should you calculate it? How should you think about how much runway you need? How do you extend your runway if you need more?

Let me try and unpick this.

The basics: What is runway?

If you have $10M in cash and $0.5M in burn, you have 20 months of runway.

But it gets more nuanced than that. The cleanest way to look at your cash balance is net cash, which is the cash you have on your balance sheet less any debt you've drawn.

Why? Because debt is borrowed money. It's not yours. You owe it to a creditor. Just like you make personal budget decisions based on your assets less whatever debt you owe, you should think about your company's cash position the same way.

Having the ability to borrow money is helpful when you're facing a cash crunch, but drawing it comes at a cost. It makes it harder to raise your next round. It comes with covenants which means debt holders can own more and more of your company. It can be a negative signal, and it can generate overhangs.

That said, if you are tight on money, secure a venture debt line and just don't consider it part of your runway. Don't draw on it unless absolutely necessary, with eyes wide open to the tradeoffs.

Monthly burn—this is different from your net income.

Net income is an accounting concept. Burn is cash in less cash out.

It takes into account things that aren't in your monthly P&L: if you have to buy inventory upfront, or if you have capex outlays upfront, or for a subscription company if you collect upfront on yearly contracts—all of these things impact your cash burn. You need a tight grip on what your cash burn is. There may be ways to reduce the gap between EBIT and free cash flow—maybe that means paying your suppliers later or collecting revenue earlier.

If you have a lumpy business, meaning you have to provide cash upfront to build out capital expenditures or you're purchasing inventory, you need a detailed understanding of your expected cash outlays. If you're not careful in managing and forecasting these outlier expenses, your runway can turn out to be 3 months when you thought it was 15.

A Mental Framework For Founders - Runway and Milestone

If you are reading this newsletter, previously I have mentioned "You are raising fund not to increase your runway, but to achieve certain commercial inflection points or milestones."

As a founder, how should you look at this graph?

Suppose you and your CFO put your heads together, and your best guess for how money changes over time looks something like this chart.

This is your cash-out point. 12 months before that, it's time to think about raising again.

Runway doesn't come in a vacuum. It's tied to meeting valuation milestones.

Green - Milestones & Black - Runway

Think of driving your car on the motorway and running out of petrol. What matters is not how much petrol you have in your car, but whether it's going to last you until you reach the next petrol station. Think about what your goal is for your next fundraising. Maybe it's an up round. Maybe it's a flat round. Maybe it's a down round. Maybe it's to reach cash flow positive.

Whatever your goal is, which is a conversation between the leadership team and the board, there is some valuation milestone attached to achieving that goal. Figure out what metrics or "fundamentals" get you to your goal. Maybe it's ARR. Maybe it's Gross Profit. This is the green line on this chart.

The mental framework is that well before you run out of cash, you need to make sure you have the fundamentals in order to meet your next valuation milestone.

Raising your next round on pure story is not enough anymore. It worked when you were a cute little baby startup; you smelt like a baby, smiled like a baby and did cute little poos like a baby. But now you’re in your terrible twos. Story is no longer good enough.

That worked when capital was plenty, but investors now care about your metrics, and more importantly your financials. Make sure you are focused on getting that valuation milestone to the right place.

Now, you've done the exercise of figuring out your runway versus your metrics and valuation fundamentals. There are three possible scenarios for your runway situation:

• Bucket 1: <12 months of runway, when it is existential to focus on your runway.

• Bucket 2: 12 months of the runway but not enough to raise a flat round based on rational metrics. Here it's critically important to focus on the runway.

• Bucket 3: Enough runway to raise a flat round, up round or reach cash flow positive: Stay the course and continuously optimise.

Some founders are in Bucket 1. A few are in Bucket 3. But many are in Bucket 2. If we can emphasise one point in this deepdive it's that many founders may think they're in Bucket 3 but are actually in Bucket 2.

The financials that you have to reach to cover your next round have changed. The bar has been raised. Many of us are 3-4 years away from reaching our last valuation, with less than that amount of cash. In that case, focus on managing the runway, even if you have years of runway remaining.

So - how to extend your runway?

If you take us at our word that all probably need more runway than thought, the question is: How do you get it?

Like many things in business, it's easy to say and hard to do.

The first step in getting tactical is to understand your current state.

I’m a big believer in founders understanding numbers. I have Mr Arthur Russell of Stratford College fame to thank for that; there’s so much free knowledge online these days you really have no excuse.

This means looking deeply into your P&L. If you're talking about runway, that means you're losing money every month. So you have to figure out where the net loss comes from. Once you've identified the specific places in your P&L causing your burn, you can start thinking about which dollars yield efficient growth and which are not as helpful.

To understand which parts of your P&L need to be addressed, begin with the big picture and break it down into parts. Starting with net loss, you can break that into two parts: gross margin and opex.

Then break each of those down into component parts:

• What are all the drivers of your gross margin?

• What is the cost of sales, etc?

• What are all the drivers of compensation opex and non-compensation opex

• How much of the opex is dedicated to computer hardware, hosting and subscriptions, etc?

Keep breaking it down until you have a detailed view of the components that contribute to total net loss.

Once you've identified the important contributions to your burn, you can plot them in terms of their burn impact on the y-axis. Then there's the ease of execution:

How easy is it to address and how big an impact does it have? Unfortunately, you're not likely to find many items that are high-impact and easy to execute. Changes that extend your runway a lot will almost certainly be difficult. This plot is important because it will set your roadmap for the actions you take to extend your runway.

Once you understand the levers available to impact the runway, you can use them to set a goal. Your goal should be oriented around how long it's going to take for you to reach a rational milestone. Let's say your goal is a flat round. Given the market conditions, for many of us that's going to take us three years.

To unpack why that is:

Say you hypothetically raised your last round at a billion pounds, and you have five to 10 million of ARR. If you want to raise your next round at a billion pounds, you might need 75 to 100 million of ARR, which might mean you need to grow about 10 to 15X. It takes time to do that. It very well might take three or four years.

If it takes three years, you need four years of runway. The reason: as mentioned earlier, you want to raise 12 months before running out of money. Generally, investors view it as a bad sign to have a very short runway, so you want to avoid being in this situation when raising a round. So the time you need to hit your goal plus 12 months is the ideal runway.

One recommendation: When you decide how long it will take to reach your goal, be realistic. Use public comps and ask the toughest board member. Ask them what it will take to reach a flat round based on rational milestones, and then add 12 months.

So now you've taken the steps to understand where you are, and you've broken down your P&L to understand where the money goes. You've plotted your options in terms of ease-to-execute versus burn impact. And you've set a goal based on rational milestones.

So let's say hypothetically you need to cut your burn from £3 million a month to £2 million. We won't sugarcoat this: It's going to be hard. Of course, a people-related cut is the hardest decision any leader makes. Beyond this, you may face many challenging and nuanced decisions:

If you're a global company, you might need to reevaluate certain markets. If you're a company that's relied on a marketing or sales investment in order to grow, you might have to reevaluate your strategy. You might have to increase pricing. This is scary, especially if you don't have time to fully test the value proposition.

The big thing to remember is this: If you take the steps necessary to extend your runway in line with rational milestones, you and your whole company will be better on the other side.

So Overall:

You likely need more runway than you think. Ultimately, your next round will be based on your metrics, which is going to be reflected in your financials.

Be honest about what bucket you're in. Most companies are in Bucket 2, which is more than 12 months of cash, but need to make some changes.

🤖 AI in fundraising

Fundraising is undeniably time-intensive and often pulls focus from the critical work of building your business. The good news? The landscape of AI tools is rapidly evolving, offering increasingly sophisticated ways to save precious time – whether you're summarising investor requests, meticulously preparing for meetings, or streamlining the management of due diligence materials.

This week, I've been diving into a few platforms that have truly impressed me with their potential to be game-changers for any fundraising effort:

Signal by NFX is a powerful tool that goes beyond traditional lead sourcing. Unlike more general databases, Signal offers "founder-intent" data, allowing you to identify early-stage startups before they even officially kick off a fundraising round. This "signal-based" approach is especially useful for pinpointing early movers in competitive verticals, giving you a significant head start in identifying promising opportunities.

Clay.com stands out for its incredible flexibility in building automated workflows. It seamlessly integrates multiple data sources like LinkedIn, Crunchbase, and Twitter into a single, enriched profile. For those looking to construct highly custom lead pipelines, especially when layering complex conditions for targeting, Clay offers a level of automation and data enrichment that can truly revolutionize your outreach strategy.

Outreach.io (or similar sophisticated sales engagement platforms) offers a deeper dive into multichannel sequencing. While perhaps more common for sales teams, its advanced capabilities for managing email, LinkedIn, and call sequences, coupled with superior reply tracking, make it invaluable for high-volume investor development. It ensures your outreach is consistent, tracked, and optimized for engagement.

Interesting Things I Read

Raise for Resilience: The New Capital Efficiency Playbook for B2B SaaS

A growing consensus from Forum Ventures, SaaSiest, and others stresses the need for B2B SaaS founders to "raise for resilience." Investors now expect 24–30 months of runway, marking a clear departure from the "growth at all costs" era. This means operating lean, hitting milestones consistently, and realizing that more capital isn’t always better—sustainable, adaptable growth is the new goal. (Read)

AI’s Practical Impact: Transforming B2B Marketing and Sales

In 2025, AI is a core growth driver in B2B marketing and sales, with 89% of leading businesses investing to boost revenue. Key trends include hyper-personalized experiences at scale, predictive analytics to identify top leads, and process automation to unlock team bandwidth. For early-stage founders, embedding AI deeply is no longer optional—it’s foundational. (Read)

Key B2B SaaS Trends for 2026 and Beyond

Beyond AI, emerging trends include Platform-as-a-Service (PaaS), low/no-code tools, robust API integrations, and Data-as-a-Service (DaaS) models. SaaS security is now table stakes. Early-stage startups must build secure, integrated, and flexible platforms to meet evolving enterprise needs. (Read)

Founders’ Guidelines

• Demystifying Venture Capital – When and how to raise VC, what investors look for, and why legal strategy and timing matter more than ever.
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• What Makes a Great Biotech VC – A nuanced take on the mindset, patience, and technical depth required to invest successfully in biotech.
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• How VCs Value Your Startup – Free Excel model that shows how investors use the VC Method to forecast returns, dilution, and valuation across rounds.
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• 10 Must-Have Resources for Founders – A curated list of pitch decks, investor databases, cold outreach templates, and financial modeling tools to streamline your startup journey.
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• Top 27 VCs to Call for Your AI Seed Round – A go-to list of investors actively backing AI startups at the seed stage, from Accel to Wing.
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My promise to you

Every piece of advice in this newsletter comes from actual experience: deals I've closed, terms I've negotiated, and strategies I've refined through real-world application.

I'm not here to give you startup platitudes or generic advice. Instead, you'll get practical, actionable tactics that you can implement immediately in your fundraising journey.

The goal? To help you raise money faster, at better valuations, while protecting your interests and your time.

– David

About Raise Like a Pro

Raising a funding round isn’t rocket science. It’s not even brain surgery. But it's incredibly time-consuming, HARD and emotionally challenging.

As a founder, your time is better spent building product, finding product-market fit, signing up customers, and building your team. Yet fundraising demands an enormous amount of your attention and energy.

I've witnessed countless founders struggle with this balance. They get stuck in the cycle of endless pitch meetings, confusing feedback, and the dreaded "no's" that seem to pile up without explanation. Even successful companies like Canva, now valued at $25.5 billion, started with their CEO Melanie Perkins hearing "no" over 100 times before getting that crucial first "yes."

What this newsletter will give you

I'm going to share my exact playbook – the same one I use to raise millions for startups across the world. This isn't about theory or inspiration. Instead, you'll get:

• The actual processes I use to close deals.

• Step-by-step morning routines for effective fundraising.

• Real email templates that get responses.

• Meeting scripts that convert to term sheets.

• Pipeline management techniques that close deals.

• The stuff you really need to know so you don’t get screwed by investors.

My days are spent navigating negotiations with every type of investor: angels looking for their next big win, syndicates pooling capital for bigger deals, and VC firms conducting thorough due diligence.

I'll share insights from all these perspectives, helping you understand how each type of investor thinks and what they're really looking for.

Raise like a Pro is what David Levine does every single day though this business Glenluna Ventures. An exited founder, he raises money each and every day for founders all over the world from investors all over the world.