Category season file
Cash, burn, and survival reflexes.
posts in this decision room
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Days payable outstanding (DPO) shows how many days you take to pay suppliers. Learn the DPO formula, a worked example and how it stretches startup runway.
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Days sales outstanding (DSO) shows how many days it takes to collect cash after a sale. Learn the DSO formula, an example and how slow payers cut runway.
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Non-dilutive funding is capital you raise without selling equity: grants, revenue-based financing, venture debt, customer prepayment and prizes. Here is how each works, what it really costs and when it beats a priced round.
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What is T2D3? T2D3 explained: triple ARR twice, then double it three times. See the math from $2M to $144M ARR, the monthly growth needed and its limits.
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How to calculate customer acquisition cost (CAC): the formula, what to include in it, blended vs. paid CAC, a worked example and the mistakes that make CAC look cheaper than it is.
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Startup growth rate formula explained: MoM growth, CMGR and annualized growth, with a worked MRR example and the traps that make growth look better than it is.
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Deferred revenue is cash a customer has paid for service you have not delivered yet. Learn how it works, how annual prepay changes your runway, and why you should not treat it as profit.
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Revenue per employee shows how much recurring revenue each person on your team supports. Learn the formula, a worked example and how to use it before you hire.
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SaaS quick ratio explained: the formula, the 4.0 rule of thumb and a worked MRR example showing whether growth outpaces churn in your subscription business.
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Operating leverage for startups explained: how fixed and variable costs decide whether growth lifts profit or deepens losses, with the degree of operating leverage (DOL) formula and a worked example.
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What is contribution margin? The formula, per-unit and ratio versions, a worked SaaS example and how contribution margin sets your break-even point and runway.
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Cash flow vs profit explained for startups: why timing gaps make a profitable company run out of cash, with two worked examples and how each number moves runway.
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Gross burn vs net burn: gross is total monthly spending, net is spending minus cash collected. See both formulas, a worked example and which sets runway.
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A startup financial model is a month-by-month projection of revenue, costs and cash. Here is how to build one from five inputs, test it with scenarios, and avoid the mistakes that make investors stop trusting the spreadsheet.
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How long does it take to raise a seed round? Split it into prep, pitching and closing, add a slip buffer and learn when to start so runway never hits zero.
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What is EBITDA? It's earnings before interest, taxes, depreciation and amortization — a measure of operating profit. Here's the formula, a worked startup example, and the reasons an EBITDA-positive company can still run out of cash.
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Customer concentration risk is the share of revenue tied to a few clients. Learn the thresholds, the runway math of losing one, and how to cut the exposure.
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A startup hiring plan sets headcount against runway. See the true cost of a hire, how payroll drives burn rate and how to sequence hires without running dry.
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Ramen profitable means your startup's revenue covers the founders' bare living costs. Learn the formula, a worked example, and why it extends your runway.
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How to extend startup runway: 7 proven levers, from cutting burn to raising net MRR, with worked month-by-month math and the order to pull them in.
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Unit economics show whether you make or lose money on a single customer. Learn the formula, a worked example with CAC, gross margin and payback, and the benchmarks investors check first.
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Every sprint costs runway. A practical guide for product managers and engineers to the five startup metrics leadership watches — and how to frame roadmap and technical decisions in those terms.
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Joining a startup is a bet on how long the company can survive. Nine questions to ask before accepting an offer — about runway, burn, revenue and the next funding round — and how to read the answers.
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Every request to an AI model costs money, so an AI app's margin moves with usage. How vibe coders can calculate cost per user, price above it, find break-even and protect personal runway.
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The startup break-even point is the monthly revenue where income covers every cost. Learn the formula, a SaaS example and how growth speed decides runway.
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Gross margin is the share of revenue left after the direct cost of delivering your product. How to calculate gross margin for a startup, what a good SaaS gross margin looks like, and how it quietly sets your burn and runway.
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Revenue-based financing repays investors as a fixed share of monthly revenue until a cap is hit — no equity, no fixed bill vs. venture debt.
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MRR is recurring revenue normalized to a monthly figure; ARR is just MRR times 12. Here's how to calculate both, the conversion mistake that inflates them, and why MRR — not ARR — is the number that actually protects your runway.
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Venture debt buys a startup extra runway without pricing a new round. Here's how it works, what it really costs in warrants, and when it backfires.
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The Rule of 40 says a SaaS startup's growth rate plus profit margin should clear 40%. Here's the formula, benchmark scale, and worked examples.
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Why do startups fail? Real data says it's rarely just running out of cash — no market need, bad timing, and founder burnout usually show up first. Here are the 9 failure modes, what the numbers actually say, and the signals that show up before the ending does.
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A bridge round buys a startup extra runway between priced rounds. Learn how SAFE and convertible note bridges work, and what they cost in dilution.
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A plain-language startup glossary: runway, burn rate, burn multiple, SAFE, dilution, PMF, ARR, CAC and 35+ terms defined in one or two citable sentences each.
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Burn multiple explained: the formula (net burn ÷ net new ARR), David Sacks' benchmark scale, worked examples, and practical ways to improve capital efficiency.
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How to calculate cash burn straight from your bank balance: the period formula, 3-month averages, handling one-off expenses, and how cash burn drives runway.
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The short answer is 18–24 months after a round — but the right number depends on stage, market, and your next milestone. Benchmarks and alarm thresholds explained.
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Learn how to calculate runway step by step: the formula, worked examples, healthy benchmarks, and a free runway calculator.
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How to calculate burn rate step by step: the gross vs net burn formula, worked examples, and the benchmarks that show whether your burn is healthy.
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Read the 7 early-stage decisions that look harmless but drain cash, team focus, and investor trust at the same time.
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Weigh bootstrap against seed funding by reading speed, control, and the cost of learning in one table.
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Default alive means your current growth and burn reach profitability before cash runs out. Learn the formula, sector nuances, and the mistake founders make.
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The SaaS magic number explained: the formula, worked examples, benchmark ranges, and how it differs from burn multiple as a sales efficiency signal.
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CAC payback period explained: the formula, a worked example, benchmark ranges by segment, and why it decides how much runway growth really costs you.