Money, pricing & model

What financial basics does every founder need to understand?

The short answer

Know your cash balance, monthly burn, runway, and gross margin cold, these four numbers decide whether you live or die. You don't need an accounting degree, but you must be able to read a P&L and a cash-flow statement. Cash is the only thing that actually kills startups; revenue and profit are downstream of managing it.

Go deeper, your way

3 hand-picked resources. Pick how you want to dig in.

📄 Article
Free Beginner

Why we picked it Stripe's founder guides are clean, trustworthy primers on the core financial concepts every founder must track, burn, runway, and cash management. Written for operators, not accountants.

Startup Financials: Burn Rate & Runway, Stripe / Founder Guides

From stripe.com by Stripe guide library

  • Runway = cash balance divided by monthly net burn
  • Cash, not profit, is what actually kills startups
  • Start reacting to a shrinking runway 6-9 months out, not at the last minute
Open stripe.com
📖 Book
Paid Intermediate

Why we picked it The most accessible book for non-finance founders on reading a P&L, balance sheet, and cash flow statement. It demystifies the three core statements without requiring an accounting background.

Financial Intelligence for Entrepreneurs

From hbr.org by Karen Berman & Joe Knight book (~304 pages)

  • The three statements each answer a different question, read them together
  • A profitable company can still go broke on cash flow
  • Founders should be able to interpret their own numbers, not just delegate them
Open store.hbr.org
📄 Article
India Free Beginner

Why we picked it A practical India-specific reference on GST, TDS, ROC filings, and startup tax compliance, the stuff Indian founders most often get wrong. Written for founders navigating Indian regulation, not US incorporation.

ClearTax / Razorpay Rize, GST, TDS & Compliance for Indian Startups

From cleartax.in by ClearTax guide hub

  • Register the entity correctly and get GST registration once you cross the threshold
  • Deduct and deposit TDS and file returns on time to avoid steep penalties
  • Engage a competent CA early for compliance rather than DIY-ing filings
Open cleartax.in

Terms in this answer

People also ask

What is burn rate and runway, and how do I calculate them? Burn rate is how much cash you lose per month (net burn = cash out minus cash in); runway is your cash balance divided by monthly net burn, literal... Beginner 2 resources → How should I manage cash flow so my startup doesn't run out of money? Take your profit (and taxes) off the top before you touch the rest, invoice fast, and collect faster, cash timing kills more startups than lack of ... Intermediate 3 resources → Do I need an accountant and proper bookkeeping from day one? Yes, set up clean bookkeeping and a separate business bank account from day one, even if it's just simple software plus a good CA. Messy early book... Beginner 3 resources → What taxes and compliance do I need to handle as an Indian startup? At minimum: register the entity correctly, get GST registration once you cross the threshold, deduct and deposit TDS, and file income tax and ROC r... Intermediate 2 resources → How do I read a P&L, balance sheet, and cash flow statement? The P&L shows if you're profitable over a period, the balance sheet is a snapshot of what you own and owe, and the cash flow statement shows money ... Intermediate 3 resources → Should I open a separate business bank account before I even register the company, or use my personal account for now? Mixing personal and business money is the first accounting mistake most first-time founders make, and it costs you when tax season or fundraising a... Beginner 3 resources →

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