Runway anxiety is usually a visibility problem
Founders often ask, “What’s our runway?” and expect a single number. But runway is a narrative — and the narrative breaks long before the bank balance does.
In modern stacks, the biggest surprises come from commitments that were already made but never surfaced as a single picture.
Why forecasts feel unreliable (even when the model is ‘good’)
Most runway models fail for two reasons:
1) They treat commitments as if they will arrive neatly as invoices.
2) They underestimate how timing behaves in real companies (renewals cluster, prepaids land in bursts, usage spikes late).
So the model looks clean, but the business behaves messy — and leadership learns to distrust the output.
Commitments: the hidden driver of cash
Commitments show up everywhere:
• Hires that are “approved in principle” but not reflected in the cash view yet.
• Renewals and annual prepaids that hit in a single week.
• Usage‑based bills that spike when product usage grows.
• Vendor changes agreed in conversations but not tracked as future cash.
If these aren’t visible, you can produce forecasts all day and still feel uncertain.
A better weekly question than “what’s our runway?”
Replace “What’s our runway?” with:
**What would change our runway story in the next 30 days?**
This forces the team to surface what matters: hires, renewals, collection risk, one‑time payments, and planned experiments. It’s a leadership habit, not an accounting exercise.
The two most common cash cliffs (and how to spot them early)
1) Renewal clustering
Tools bought across the year start renewing around the same few weeks. When renewals aren’t owned, cash takes a surprise hit.
2) Annual prepaids
Discounts feel good until the cash cliff arrives. The cliff is avoidable if timing is treated as a first‑class input.
How to create a commitment view without slowing down
You don’t need heavy processes. You need a lightweight way to keep commitments visible. Aim for a single view that answers:
• What’s committed vs optional?
• What’s the timing?
• Who owns it?
• What could change the runway story this month?
Even if the data lives across tools today, the standard is the win: visibility + ownership + cadence.
What ‘cash clarity’ looks like (high level)
Cash clarity doesn’t mean perfect precision. It means:
• You can explain the runway story in plain English.
• You can name what changes it in the next 30–60 days.
• Major commitments are visible before they become invoices.
• Renewal timing is owned and reviewed, not discovered late.
Where this fits in the AI era
AI can help summarize spend, flag anomalies, and speed up categorization. But AI can’t invent missing commitments. Standards first, automation second.
Founder checklist (10 minutes)
1) List the top 10 commitments that can hit cash in the next 60 days.
2) Assign an owner for each.
3) Mark timing as ‘known’ or ‘uncertain’.
4) Identify any renewal clusters.
5) Decide the one action that prevents a cash surprise this month.
fit‑check
If you’re Seed–Series B and cash feels heavier than it should, reply with stage + cash.
— Karthik Sreedharan | Actnow | Finance OS™
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