The 3 Numbers Every Startup Founder Must Know

You don't need to be a finance expert. But you do need to know these.

After a decade working inside early-stage businesses, we've sat across the table from many founders. The ones who build with confidence all share one thing: they know their numbers.

Not every number. Just the three that actually matter.

1. Net Burn Rate

How much cash is your business spending each month, after revenue? This is your net burn rate - and it's the most important number in any early-stage startup.

If you don't know it off the top of your head, that's the first thing to fix.

2. Runway

Divide your cash in the bank by your monthly net burn. The result is your runway — the number of months you have before you run out of money.

Aim for at least 12 months at all times. If you're below 6, every decision you make needs to account for that.

3. Gross Margin

For every pound of revenue you bring in, how much do you keep after the direct cost of delivering it? That percentage is your gross margin. For most service or software businesses it should be 60% or above.

A low gross margin doesn't make growth impossible — but it does make it much more expensive.

Your numbers tell the story of your business. Make sure you're the one telling it.

These three numbers — burn rate, runway, gross margin — won't give you a complete financial picture. But they will tell you whether your business is healthy, how much time you have, and whether your model works. That's a very good start.

If you're not sure how to calculate any of these, or your numbers are raising questions you don't know how to answer, let's talk.