Angel investors
How can an angel inspect the runway assumptions of a deep tech startup?
a deep tech startup: Inspect runway as a dated cash plan with commitments and uncertain receipts.
Inspect runway as a dated cash plan with commitments and uncertain receipts. A cash-divided-by-burn figure can be informative while missing payment timing and planned changes. Do not assume a future financing round will arrive on schedule.
Start with the decision
Reconcile the starting cash, recurring costs, one-time obligations, collections, and hiring assumptions. Compare a delayed milestone and a lower-spending scenario. Use qualified finance review for formal statements and accounting questions.
The illustrative scenario
This is an educational workbook. The company or fund and all numerical inputs below are fictional. They are not ADIN results, customer claims, market benchmarks, or a forecast.
The fictional team is developing a sensing component with a laboratory prototype. Commercial customers require validation outside the lab before a design win. Manufacturing and qualification milestones compete for the same runway.
A successful laboratory test does not establish production reliability or buyer adoption. Keep technical feasibility, manufacturability, customer qualification, and commercial commitment separate.
A simplified priced-round and cash comparison
Assume a fictional priced equity round of $5,000,000.00 at a pre-money value of $20,000,000.00. A $50,000.00 check divided by the simplified post-money amount produces 0.200% ownership. If a later issuance reduces existing holders by an assumed 24%, that interest becomes 0.152% without participation.
The exercise omits option pools, convertibles, preferences, fees, side agreements, and other actual terms. It is not a SAFE conversion model or a recommendation to invest or preserve ownership. Actual cap-table and document analysis belongs with qualified advisers. A percentage of ownership does not specify eventual proceeds or protect against total loss.
The fictional company's $1,500,000.00 of cash divided by $140,000.00 of monthly use gives 10.7 months under a constant-use assumption. Compare the next financing milestone with the resources and dependencies needed to reach it. Use qualified technical reviewers for claims outside the investor's expertise. Connect that simple quotient to dated obligations and milestones before drawing a conclusion about financing needs or progress.
| Item | Illustration |
|---|---|
| Assumed pre-money value / round size | $20,000,000.00 / $5,000,000.00 |
| Fictional investor check | $50,000.00 |
| Simplified initial ownership | 0.200% |
| Assumed later dilution | 24% |
| Ownership without later participation | 0.152% |
| Cash / constant monthly use | $1,500,000.00 / $140,000.00 |
Use this worksheet
Answer the questions with a source, date, owner, and next action. Mark an unknown as unknown. Use public or permissioned information and involve a qualified specialist when a question requires expertise beyond the team’s competence.
- What cash is available now?
- What payments are committed?
- Which receipts are uncertain?
- What milestone is financed?
- When is a decision required?
Questions specific to this scenario
- What test can be reproduced?
- Which milestone depends on a third party?
- What changes between prototype and production?
Request dated test protocols, repeatability results, independent technical references, and a milestone budget. Distinguish a customer's evaluation agreement from an order.
A concrete next test
Ask a qualified technical reviewer to identify a repeatable test that distinguishes laboratory feasibility from the next commercial milestone. Record the equipment, conditions, dependencies, and evidence needed. A dramatic demonstration should not substitute for the specified validation process.
Interpret the result
The purpose is to understand dependency and timing, not to promise an exact survival date. A runway discussion should reveal what the company will change if an assumption fails.
Compare the next financing milestone with the resources and dependencies needed to reach it. Use qualified technical reviewers for claims outside the investor's expertise.
Sources and method
These primary resources provide background for the concepts. The fictional scenario, calculations, and worksheet are ADIN educational examples; the sources do not report or validate those invented results. Reviewed October 11, 2026.