Scenario Analysis
A financial planning technique where you model different possible futures to understand how decisions affect outcomes like runway and cash flow.
The scenario overlay shows your base case alongside alternative futures, all on one chart.
What is Scenario Analysis?
Scenario analysis is the practice of asking "what if?" and computing the answer. What if we hire two engineers? What if we lose our biggest customer? What if we raise prices by 20%?
Each scenario adjusts one or more financial assumptions and shows the downstream impact on metrics like runway, burn rate, and cash position. The value isn't in predicting which scenario will happen — it's in understanding the range of possible outcomes so you can make informed decisions.
In startup finance, scenario analysis typically covers hiring plans, revenue assumptions, cost changes, and funding scenarios.
Why it matters
Every major business decision has financial consequences that ripple through months of runway. Without scenario analysis, founders make these decisions on intuition — "we can probably afford two more hires" — rather than computed outcomes.
Scenario analysis also prepares you for board conversations. When a board member asks "what happens if growth slows by 30%?", you should be able to show the answer in seconds, not promise to update a spreadsheet by next week.
Example
You have 14 months of runway. You model three scenarios: (1) Hire 2 engineers — runway drops to 10 months. (2) Close a $5K MRR deal — runway extends to 16 months. (3) Both — runway stays at 12 months. Now you know the deal needs to close before the hires start.
How RunwayCal helps
RunwayCal has built-in scenario modeling with 7 adjustment sliders. Create multiple scenarios, compare them side-by-side with the scenario overlay chart on Mission Control, and see exactly how each what-if changes your runway. All results are deterministic — arithmetic from your inputs, not predictions.
Common mistakes
- 1Modeling only optimistic scenarios and ignoring downside cases
- 2Not updating scenario assumptions as the business changes
- 3Creating too many scenarios without comparing them to a clear base case
Model any decision before you commit
RunwayCal's scenario overlay shows multiple futures on one chart — so you see exactly what each what-if costs in months of runway.
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