Startups have drastically lowered their operating expenses, retaining an average runway of 22 months, according to NY-based Kruze Consulting, an accounting and CFO consulting firm servicing over 800 venture funded startup clients. The firm analyzed the last three years of startups’ data.

Median runways continue to remain robust, rising toward the end of 2023 compared to the beginning and surpassing levels seen in 2019-2021. According to the data, cash balances average $5 million, down from the highs in 2022 but still higher than pre-bubble levels.

There was a mass cut of startups at the end of the fourth quarter of 2023. Currently, 33% of startups have only six or less months of runway, so another wave of startups shuttering over the next several months is expected.

However, in 2019, nearly half of all companies had a runway of six months or less. Given this, the data implies that the startup ecosystem’s health has improved since then as founders have improved their burn management skills, according to Kruze.

Overall, founders want to increase income while keeping operational costs and burn rates under control. They’ve positioned themselves to weather the current market conditions and, if things improve, to accelerate their expansion. “Founders have learned to do more with less and are currently operating capital efficient businesses that continue to grow,” Kruze explained.