Managing Startup Finances

Nathoo says founders should know their bank balance, money coming in, and money going out. Those figures are enough to calculate burn and runway: for example, $150,000 in the bank and a $15,000 monthly burn gives 10 months of runway. She also describes growth rate and a calculator for estimating whether revenue can reach profitability before cash runs out.

Founders should check their numbers at least weekly, and more often when runway is low or results are inconsistent. Expense forecasts should account for hiring costs beyond salary, including equipment, desk space, and health insurance; Nathoo gives a broad estimate of 25 to 50 percent more than salary. She also warns that customer acquisition can become more expensive as a startup grows.

A bookkeeper can prepare reports, but founders, especially the CEO, remain responsible for understanding them. Nathoo advises reviewing monthly reports and questioning figures that seem wrong, since bookkeepers may have to infer what transactions mean from bank statements.

Nathoo says each hire is an investment, and founders should consider whether that person adds value rather than comparing headcounts with other startups. Revenue per employee is a more useful measure than the number of employees. Before product-market fit, she recommends keeping spending low; adding salespeople or developers does not by itself establish demand.

Founders should assume they may not raise more money and aim to reach profitability on the cash they have. Nathoo says fundraising becomes harder beyond the seed stage and warns that waiting until runway is low reduces negotiating leverage; she suggests thinking about fundraising or profitability with about 12 months of runway. In the Q&A, she adds that a full-time CFO often comes later than a bookkeeper and CPA.