Ask founders what their financial runway is, and most will give you a confident answer based on their burn rate. Ask about pipeline, and the answer gets a little more foggy. Founders typically have an idea of what their pipeline looks like but lack the hard numbers they need when it comes to burn rate.
Pipeline, however, is essential to understanding your true runway. The money coming in is just as important as how much you spend. Below, we’ll discuss how to calculate pipeline with the same kind of rigor as burn rate and runway.
Key definitions
- Burn rate: Burn rate is the rate at which a startup spends its available cash. Startups use this metric before they become profitable. Gross burn rate only takes into account operating costs, while net burn rate also accounts for revenue.
- Financial runway: Financial runway is how long a startup can operate before spending all of its available cash. For example, if a company has $120,000 and spends $30,000 per month, it can operate for four months before it needs to start making a profit or raise additional funding.
- Pipeline: Pipeline refers to all of the current sales opportunities a company has identified. It includes potential deals in various stages, from initial conversations to requesting contract signatures. Each startup decides what stages it includes in its pipeline and what counts as an active potential deal.
Why runway alone doesn’t tell the whole story
Runway and burn rate are, of course, important. They’re also simple to calculate and tied to concrete, easily findable numbers. Simply open QuickBooks or whichever accounting tool you use and see how much cash you have available. Divide that by how much you spend each month, and you’ve got your runway.
That number drives spending decisions, like when to hire and how much to spend on marketing. It also determines when to fundraise.
Pipeline is the other side of the coin. It’s how much revenue you expect to come in based on the deals in your pipeline, and new revenue extends your runway.
Most founders, though, don’t treat pipeline the same way they treat burn rate. They know whether their pipeline looks strong or weak. They might even know the values of some potential deals. But they often don’t have a reliable, probability-weighted number that accounts for all deals in all stages.
In a recent study, CB Insights analyzed 431 venture capital-backed companies that shut down since 2023. They found that 70% cited running out of capital as the reason they shut down. The researchers emphasize, though, that this is a symptom rather than the root cause. The money ran out because something underneath wasn’t working.
Clear pipeline metrics give founders revenue numbers they can plan around, preventing overspending. And when something isn’t working, lagging pipeline metrics give them an early warning sign so they can change course.
Increasingly, investors are looking for “repeatable revenue, improving sales efficiency, and a credible plan to scale,” according to Kruze Consulting’s 2025 startup benchmarking data. That requires a solid understanding of your pipeline.
How to track pipeline with the same rigor as burn rate
The key to strong pipeline metrics is tracking a probability-weighted pipeline number. This means deal values account for the likelihood that they’ll actually close based on factors such as which pipeline stage they’re in, how well they fit your ideal customer profile, and how they’ve interacted with your sales team.
Let’s look at an example with deals in various pipeline stages. Let’s say you have:
- $100K of deals in early conversations (discovery stage)
- $150K in advanced discussions (proposal stage)
- $75K in verbal commitments (close stage)
Next, you’d factor in your historical close rates. If your discovery stage deals close 10% of the time, your proposal stage deals close 40% of the time, and your close stage deals close 80% of the time, your weighted calculation would look like this:
- Discovery: $100K × 10% = $10K
- Proposal: $150K × 40% = $60K
- Close: $75K × 80% = $60K
- Weighted pipeline: $130K
You now have a realistic number for how much pipeline you can expect to close. You can use this number to plan spend and calculate your runway.
One way to get this number is to calculate it yourself, which is doable if the number of deals in your pipeline is relatively small. The easier way is to use a CRM that calculates it automatically for you.
For example, Nutshell’s sales forecast report includes an option to forecast your pipeline by confidence, which automatically weights your potential deals by the likelihood that they’ll close.
Nutshell also integrates with QuickBooks Online, which keeps your customer data and payment information in sync. This means you don’t have to manually update these numbers across both your CRM and accounting tool. You can easily view both pipeline and financial data side by side.
Putting the numbers together
So you have a realistic pipeline number, you know how much cash you have, and you know how much you’re spending each month. How do you put these numbers together?
Your total monthly spend is your gross burn rate. Your net burn rate is your monthly spend minus your monthly revenue. Pipeline metrics let you project this number into the future more accurately by giving you a more realistic revenue forecast you can use in this calculation.
Then you can calculate a realistic financial runway by dividing your cash balance by your monthly net burn rate.
It’s helpful to model a few scenarios so you’re ready for various possibilities, including a best-case scenario, a downside case, and a middle-of-the-road outlook.
Review your metrics every month and decide which plan to follow based on which way your outlook is trending.
The math that changes everything
Your runway number doesn’t have to stand alone. By pairing it with realistic pipeline numbers, you get a more realistic forecast, allowing you to plan for the future. And when you’re building your startup, accuracy matters. The right metrics and the right tools can help you get there.
