Search runway

Definition

How many months the search money lasts before you are out of time.

Why It Matters

Almost everything a searcher decides is priced in months. It sets how many targets you can afford to walk away from, how long a stalling seller can cost you before you fold, and whether a deal that dies in diligence ends the search or costs a quarter of it. A buyer who runs short takes the deal in front of them, which is the most expensive thing a thin runway does. Count living costs, deal costs and a buffer for one dead deal, then add the months a close actually takes after a signed letter of intent.

In numbers: Save $90,000 against $5,000 a month of living and deal costs and the runway is eighteen months, which buys one full search and no second one.