Who This Helps
This is for Product Managers who feel the pressure of cash burn. You're making product decisions, but you're unsure how they impact your company's survival. The Founder Finance Basics Mission Pack gives you the tools to move from fear to facts.
Mini Case
Ben's team was growing, revenue was up 15% month-over-month, but his bank account felt flat. He had a vague 'six months of runway' in his head, but couldn't explain it to his board. He built his Runway Forecast Card. In 90 minutes, he saw his real runway was 4.2 months at the current burn. This gave him a clear trigger: if monthly active users didn't grow by 12% in the next 60 days, he would pause new feature development and focus on monetization. The clarity was a relief.
Do This Now (5 Steps)
- Grab your last three months of bank statements and your current cash balance.
- Calculate your average monthly net burn (cash out minus cash in).
- Divide your total cash by that monthly burn number. That's your core runway.
- Now, model one change: What if you delayed one new hire for a quarter? How does that change the number?
- Write down that final number and the one condition that would make it longer or shorter. That's your forecast card.
Avoid These Traps
- Don't use revenue projections as cash. Cash in the bank is your only truth for this exercise.
- Avoid averaging over just one month; use three months to smooth out anomalies.
- Don't forget to include upcoming one-time costs like annual software subscriptions or tax payments.
- Never present a single runway number without the core assumption behind it (e.g., '5 months, assuming current burn rate').
- Don't let perfect data stop you. A good estimate now is better than a perfect answer too late.
- Avoid mixing personal and business expenses in your calculations.
- Don't ignore seasonal dips or spikes in your revenue or costs.
- Never assume your next fundraising round will close before you need it.
Your Win by Friday
By Friday, you'll have one powerful number: your actionable runway. You'll move from saying 'We're okay for a while' to 'We have 4.3 months of runway, and we'll extend it to 6 if we hit our conversion goal next month.' You'll walk into your next stakeholder meeting with calm confidence, ready to turn that analysis into approved execution. Finance doesn't have to be scary—it's just another product to manage.