Beginner accounting
Accounts Receivable and Payable
Accounts receivable is money owed to your company by customers. Accounts payable is money your company owes to vendors and suppliers.
#finance
19 results
Glossary
Beginner metrics
ARR - Annual Recurring Revenue
ARR is the annualized value of all active subscriptions. It is the primary top-line metric for SaaS companies and a key signal for fundraising readiness.
Beginner finance
Burn Rate
Burn rate is the monthly rate at which a startup spends cash. It determines how much runway remains before the company must raise more money or turn profitable.
Intermediate strategy
Default Alive
A startup is default alive if its revenue growth will reach profitability before cash runs out. Coined by Paul Graham in 2015.
Intermediate finance
EBITDA
EBITDA measures a company's operating profitability before interest, taxes, depreciation, and amortization - a proxy for core business cash generation.
Beginner finance
Gross Margin
Revenue minus Cost of Goods Sold, divided by revenue. The foundational profitability metric that drives SaaS valuation multiples and unit economics.
Intermediate finance
J-Curve
The pattern of initial losses or decline before growth - common in VC fund returns, startup unit economics, and post-investment metrics.
Beginner metrics
MRR - Monthly Recurring Revenue
MRR is the total recurring subscription revenue a SaaS company earns each month. It is the operational heartbeat metric for tracking short-term growth.
Intermediate finance
Payback Period
Months to recover the cost of acquiring a customer from that customer's gross profit contribution. Best-in-class SaaS is under 12 months.
Intermediate metrics
Rule of 40
Growth rate % plus EBITDA margin % must equal or exceed 40. The single metric VCs use to balance SaaS growth against profitability efficiency.
Beginner finance
Runway
Runway is how many months a startup can operate before running out of cash. It defines the time to reach the next milestone or close the next funding round.
Intermediate finance
Unit Economics
The direct revenues and costs associated with a single unit of a business, used to determine per-unit profitability and scalability.
Beginner finance
Working Capital
Working capital = current assets minus current liabilities. It measures a company's short-term liquidity and ability to fund day-to-day operations.
Guides
Intermediate finance
10 min How to Build a Cash Flow Forecast
Build a 12-month cash flow forecast from scratch: direct method, inflows, outflows, runway management, and common mistakes to avoid.
Beginner finance
8 min How to Budget as an Early-Stage Startup
Learn how to build a practical startup budget when resources are scarce, priorities shift monthly, and the business model is still evolving.
Beginner finance
9 min How to Read Your Startup's P&L
A founder's guide to understanding the profit and loss statement - what each line means, how to interpret it, and what to fix.
Articles
Intermediate ai
11 min The Real Cost of an AI Startup
A clear-eyed breakdown of AI startup costs - infrastructure, inference, people, and what unit economics actually look like at different revenue stages.
Beginner finance
7 min Revenue, Profit, and Cash Flow Explained
Most founders confuse revenue, profit, and cash flow. Here is what each means, why they differ, and why getting this wrong can kill your startup.
Intermediate metrics
14 min The 10 SaaS Metrics Every Founder Should Track
Most founders track vanity metrics. Here are the 10 SaaS metrics that actually predict growth, retention, and unit economics - with benchmarks.