Opinion by Dr. Adam M. Adamek. First published on Substack on 26 May 2026. Revised for republication on 16 October 2026. Scenarios and quoted dialogue in illustrative examples are fictional, not documented client outcomes.
Consider an illustrative founder with a cash-flow model showing eighteen months of runway. The model is clean, confident and honest about everything it counts. Its weakness is what it leaves out: the gap between an average monthly burn and the dates on which cash actually leaves the bank.
Now add a co-packer retainer, equipment lease payments and a product-specific safety testing programme. Put each payment in the month it falls due. In this illustrative scenario, the cash-out date moves from eighteen months to seven. Those numbers are assumptions for the example, not a verified client outcome or a sector benchmark.
The useful question is whether your model has the same blind spot.
A technical milestone and a funded route to that milestone are different things. This essay examines the cash timing between them, while there is still time to change the plan.
The assumption to challenge
Cash divided by current monthly burn describes a static position. It becomes misleading when treated as a forecast despite changing commitments and receipts.
Cash divided by current monthly burn is a useful snapshot. It is not a forward cash-flow forecast. In a food biotech company, spending can change sharply as the process moves from bench to pilot to commercial production. Equipment payments, testing programmes and customer payment terms belong on a calendar, not inside an undifferentiated monthly average.
| Item | What to record | Decision it informs |
|---|---|---|
| Committed payments | Amount, due date, cancellation terms | Which commitments the company can support |
| Customer receipts | Contract terms, expected payment date, delay scenario | Working capital needed before cash arrives |
| Proposed financing | Separate from signed and available funding | The gap that still needs a financing decision |
| Downside case | Delayed run, additional testing, later receipts | What to rescope before the cash becomes committed |
The one number to recompute this week
Start with the commitments and expected receipts already visible to your team.
Recompute your cash-out date. Put signed leases, retainers, production payments and safety work into the month each payment falls due. Avoid counting an expense twice if it is already in the operating budget. Model delayed or failed runs as explicit scenarios. Put receipts on expected payment dates, not automatically on invoice dates. The result is a forecast under stated assumptions, not a certain date.
If that exercise reveals less time than the board forecast suggests, there is value in discovering it early. You can change the pace of hiring, negotiate milestones, revisit procurement commitments or raise capital with a clearer explanation of what it will fund.
Use the dated cash-flow forecast to decide which commitments the company can support. The forecast will still contain uncertainty. It should show that uncertainty rather than conceal it in one comfortable date.
One-minute brief
If you read no further, take this with you.
Runway can change in steps. Four items deserve a separate check: scale-up capital expenditure, regulatory work, customer payment delays and financing that has not yet been committed.
The sections below examine those four cash commitments, how they change with company stage and how to bring them into one forward-looking model.
The point is not to admire the model. The point is to find the riser you have not drawn, and to find it while it is still cheap to find.
The instrument: the four hidden escalators
Escalator one, scale-up CAPEX. Lower unit costs at higher volume can require substantial spending first. Separate the capital payment schedule from any projected unit-cost improvement. Include deposits, commissioning, ramp-up and contingency where they apply.
Escalator two, regulatory testing lead time. Build the safety work and review process required for the specific ingredient, use and market into the cash plan. The EU novel food process includes validation, assessment and authorisation steps; requests for additional information can extend the elapsed time. There is no universal testing programme or guaranteed total duration for every product.
Escalator three, the receivables drag. A large buyer can be a commercial milestone and a working-capital challenge at the same time. Model the agreed terms, expected payment date, inventory and batch costs. A signed order can consume cash before it generates cash.
Escalator four, the next round as a milestone. A financing plan is not the same as committed cash. Show a case without new equity, then model the amount, timing and conditions of a possible round separately. Do not use an uncertain financing event to conceal a funding gap in the operating plan.
The same scorecard, at your stage
Pre-seed. Estimate the cash needed to reach the next meaningful evidence milestone, together with the operating costs needed to get there.
If available cash does not reach the next evidence milestone, identify the gap before taking on new commitments. That does not establish an inevitable outcome; it identifies a decision that needs funding, rescoping or a different timetable.
Seed. Build the yield-failure buffer in, explicitly.
Model successful, delayed and failed runs separately, including contamination risk and downstream losses where relevant. Use observed process data when available. A scenario is not a measured failure rate.
Series A. Audit the receivables drag before the board does.
If, in an illustrative scenario, a buyer pays four months after delivery, the company must fund the interval. Model the agreed terms and a delay case rather than applying four months as a general buyer benchmark.
Growth. Match capital commitments to financing that can support them.
Compare equity, debt, grants, equipment leases and contract production against the actual risk and repayment profile. A credit line is useful only if it is available on workable conditions and the company can service it. There is no universally superior capital structure.
Make the opening example reproducible
Here is one way to construct the illustrative eighteen-to-seven-month change. Assume EUR 900,000 of opening cash and EUR 50,000 of monthly operating cash outflow. With no receipts, financing or other payments, the static calculation is eighteen months. These are invented inputs for a planning exercise.
Now assume additional commitments, excluded from that operating outflow: EUR 100,000 in month one, EUR 150,000 in month three, EUR 200,000 in month five and EUR 100,000 in month seven. Operating outflow over seven months is EUR 350,000; the additional payments total EUR 550,000. Together they exhaust the EUR 900,000 at the end of month seven. No empirical failure rate or client outcome is implied.
The purpose is to expose the missing cash boundary. It does not mean every business with eighteen months of reported runway has seven months left. Change the commitments, payment dates or receipts and the result changes. Within a month, payment dates can matter too: review the near-term cash position more frequently when liquidity is tight.
Write each month as opening cash plus cash received minus cash paid equals closing cash. Carry closing cash into the next period. Separate a minimum operating-cash requirement from the date the balance reaches zero. A business may need to act before zero because of payroll, contractual duties or the time needed to change production plans.
The worked example
Illustrative example: a biomass-fermentation team budgets for two years of activity and plans to move into 10,000-litre production runs. The example is a decision exercise, not a documented company case.
Its base case omits the payment schedule for the larger runs and the cost and timing of product-specific safety work. Add those obligations and delay receipts until the expected payment dates. The apparent two-year plan now needs to be recalculated. The lesson does not depend on a claimed funding outcome: a process can remain technically promising while its existing cash plan no longer supports the next step.
Technical progress does not remove the need to fund the time between milestones.
The diagnostic question
Recompute your cash-out date with the signed commitments, expected receipts and downside assumptions visible. Which decision changes first: a hire, an equipment order, the next production run or the fundraising timetable?
Check the dates, then make the decision
Use a monthly cash calendar with opening cash, committed payments, expected receipts and closing cash. Keep proposed funding separate from committed funding. Run the downside case before deciding which obligations to add.
Source note
For the EU process, see EFSA’s novel food application procedure. EFSA assesses safety; the European Commission and Member States decide authorisation. The nine-month assessment period for a complete application excludes clock-stops for additional information and is not a guaranteed total time to market. Safety evidence depends on the product and application. The planning framework and numerical scenarios above are analysis and illustration, not survey findings. Source checked on 16 October 2026.
Explore related FoodEdge reports, or contact the editor with a question about the assumptions.
