STRATEGY SCENARIO ENGINE

Where Does Your Strategy Break?
50,000-Path Monte Carlo. Full Stress Suite. VaR. Tail Risk.

Institutional-grade quantitative analysis. Burn stress. Revenue stress. Growth stress. Sensitivity. VaR. Actionable recommendations. Not a survey. Real Monte Carlo. No signup.

50,000 paths ~1.5M simulations Client-side only

Your Assumptions

50,000 Monte Carlo paths. Log-normal volatility on burn and revenue. Full stress suite. Institutional methodology.

See fluctuations. Run preset scenarios:
Running ~1.9M simulations…
Live execution
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Knowledge Base: Monte Carlo Strategy Analysis

Pick a topic below to expand. Each section has a takeaway so you can skim or go deep. Your choice.

What Is Monte Carlo Simulation for Strategy?
Instead of one guess ("18 months runway"), we run 50,000 possible futures and show you the range.

Monte Carlo is how banks and institutional investors model uncertainty. One forecast is a guess. Thousands of simulated paths give you a distribution of outcomes.

This engine runs 50,000 paths. Each month: burn and revenue are drawn from realistic distributions. Cash is tracked until zero or horizon. You get survival %, runway percentiles, and stress profiles. Not a single number.

Burn Rate and Runway Explained
Burn = cash going out. Runway = months until you run out. Monte Carlo adds: "and here's how uncertain that really is."

Monthly burn = salaries, rent, marketing, software. Everything that leaves your bank account. Runway = cash ÷ net burn (burn − revenue). Simple.

But burn and revenue fluctuate. Deals close late. Churn spikes. Monte Carlo captures that: you get "95% of paths survive at least 12 months" and "median runway is 19 months." A full picture, not one number.

Stress Testing: Burn, Growth, and Revenue
We ask "what if?" so you know where you break and how much buffer you have.

Stress tests answer: What if things go wrong? Three dimensions:

  • Burn: +10%, +20%, +50%? (Or −20%. Cost cuts help.)
  • Growth: Miss by 5%, 10%, 20%?
  • Revenue: Drop 10%, 20%, 30%?

Each runs 50,000 paths. You see survival % and median runway for every level. That tells you where your strategy breaks.

VaR and Tail Risk: Reading the Numbers
VaR 95% = "in 95% of futures, you survive at least X months." Tail risk = how bad the worst 5% can get.

VaR 95% (months) = 5th percentile of runway. In plain English: 95% of paths survive at least that long. The other 5%? That's your tail.

Tail risk = moderate (≥80% survival), elevated (50–80%), or critical (<50%). High tail risk = a few bad months could wipe you out. Low = you have cushion.

Sensitivity: Which Levers Matter Most?
The radar chart shows what moves the needle. Bigger = more impact. Prioritize those.

We vary each input ±10% and measure impact on survival. The Lever Impact Profile (radar) shows which dimensions dominate.

Pro tip: If "Monthly burn" wins, cost reduction is your best lever. If "Revenue volatility" wins, focus on smoothing revenue: recurring contracts, diversification.

Why Log-Normal? (The Math Nerd Bit)
Burn and revenue are always positive. Normal curves can go negative. Log-normal fixes that.

Burn and revenue can't be negative. A normal distribution can. Unrealistic. Log-normal = always positive, right-skewed (occasional spikes). Your volatility (σ%) scales it.

Advanced Mode: Raises, Correlation, Variable Burn
Model a future raise, cost cuts when revenue drops, or burn that scales with revenue.
  • Capital injection: Planned raise at month X. We add the cash and keep simulating.
  • Burn–revenue correlation: When revenue drops, does burn drop? (Negative = you cut costs.)
  • Fixed vs. variable: Share of burn that scales with revenue (COGS, commissions) vs. fixed (rent, salaries).
How to Use Your Results (Action Guide)
Survival <60% = act now. 60–80% = build buffer. Know your breakpoint. Export for the board.
  • <60% survival: Critical. Cut burn or raise capital now.
  • 60–80%: Elevated. Build buffer; cost cuts or revenue acceleration.
  • Burn +X% breaks you: If +15% drops you below 50%, you have little margin.
  • Cut burn 20%: See the survival bump. Quantifies cost reduction value.
  • Export CSV: Share with board, investors, CFO.
Related Tools
Strategy stress + Risk Snapshot = full picture.

Pair this with the Risk Snapshot for strategy + portfolio + operational risk. Contact us for tailored analysis.