In general I recommend that in early-stage startups you try to raise at least 15-18 months of runway.
What is the Right Burn Rate for your Startup?
Mark Suster

Wouldn’t it be healthier for the business to not make such a blanket statement to start burning so you run out of money in 15–18 months? Instead, shouldn’t you keep burn low until you start feeling the heat of the growth, then start slowly increasing your burn? So you might start with 24 months of runway and then start increasing your burn so that by the time you’re raising you’d actually be burning a lot more than you were a couple months after receiving the investment? This seems more sustainable for the business and entrepreneurs than just immediately increasing burn significantly after getting funding to match the market’s expectation that you should run out of cash in 15–18 months.

Additionally, at times, it can feel like the market is determining how much you actually raise. If you are fortunate enough to even have 1 investor interested in supporting your dreams, you’re typically raising a smaller number than the unlikely scenario where several investors get excited and want to participate in the round. Much of the size of the round is based on what you set the expectation at the start, but it can float higher based on interest. In that case, based on your advice, you might be increasing burn to an unhealthy amount for the stage of the company.

If your company is growing and the next round will be easy to raise, your advice to burn cash quickly seems right to fuel faster growth. But in the very likely event that your company isn’t growing as fast you hoped, and you’re forced to raise again prematurely, that burn is just destroying your ownership in the company leading to an exchange of equity to your investors (if they decide to support you again).

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