Knowing your numbers isn’t just finance-speak – it’s what separates startups that fizzle from those that scale. Whether you’re pitching investors or planning your next hire, a solid handle on your financials is key to leading with clarity and confidence.
In a recent webinar, our Director of Startup Banking, Rob Burnett, sat down with Jeff Erickson, Director of Strategic Partnerships at Forecastr, to talk through the essential financial practices every founder should master. From understanding key metrics to building investor-ready models, they shared practical guidance for turning financial data into business decisions.
From Founder to Financially Fluent CEO
As Rob Burnett pointed out, there’s a big difference between being a founder and being a CEO. Founders build products. CEOs build companies – which means mastering the numbers.
“You can have a great product and still struggle if you don’t understand how your financials work,” Rob said. “Investors, lenders, even partners – they all want to see how your business performs and how you plan to grow.”
Jeff echoed that sentiment, emphasizing that a strong financial model is more than a spreadsheet. It’s a blueprint for decision-making. “Accounting tells you where you’ve been. Finance tells you where you’re going,” he said. “A model helps you understand your burn rate, plan for hiring, and most importantly, figure out how much you need to raise and when.”
What Founders Need to Track
So what numbers matter most? Jeff shared a quick crash course on the metrics every founder should be fluent in:
- MRR (Monthly Recurring Revenue): The predictable, recurring revenue your business earns every month. This is especially important for SaaS and subscription-based startups, as it helps gauge growth, stability, and scalability over time.
- Churn Rate: The percentage of customers who cancel or stop using your service during a given period. A high churn rate signals issues with product-market fit, user experience, or retention strategy.
- Burn Rate: The rate at which your company is spending money, usually monthly, before generating positive cash flow. It’s a critical measure of how quickly you’re using your funding or cash reserves.
- Runway: The amount of time your company can continue operating at its current burn rate before running out of cash. It’s essentially your countdown clock for raising your next round or reaching profitability.
These aren’t just buzzwords, but they’re indicators of a startup’s health and growth potential. When founders can speak confidently about these numbers, they build trust with investors and make sharper decisions internally.
Rob added that from a banking perspective, projections matter just as much as historicals. “We review your past performance, but what we’re really looking for is your vision for the future; how you plan to grow, and how prepared you are for different scenarios,” he said.
The Value of Building Financial Habits Early
Understanding your metrics is step one. Step two? Building the discipline to track them consistently. Rob emphasized that financial habits formed early can make or break a startup’s ability to scale or secure funding down the line.
“Banks often look backwards when considering loan applications, reviewing a couple of years’ worth of financial statements. Even if you don’t anticipate needing debt financing soon, having your financials in order now can save significant effort later.”
He continued: “Building the habit of creating annual projections and comparing them against actual results develops critical muscle memory for entrepreneurs. This ongoing practice not only strengthens your financial management skills but also builds credibility.”
This discipline pays off when it’s time to raise capital: “When lenders or credit officers underwrite your loan, they’re betting on your future performance. Being able to present a consistent track record of projections and outcomes, along with clear forward-looking projections, demonstrates your ability to repay debt and manage your business effectively. This skill takes years to develop, so starting early is invaluable.”
This mindset of proactive financial management is a key differentiator for startups seeking capital, whether through debt or equity.
Moving Beyond the P&L
Later in the session, Jeff warned against relying solely on the profit and loss statement (P&L). “You can be profitable on paper and still run out of cash. That’s why Forecastr helps startups build three-statement models: income statement, cash flow, and balance sheet. Together, they give a clearer picture of your financial health and help you spot trouble before it hits.
Beyond just tracking numbers, a three-statement model helps founders see how different parts of their business impact each other. For example, profits reported on the income statement don’t always translate to cash on hand, which the cash flow statement reveals. Meanwhile, the balance sheet shows how investments, debts, and retained earnings build up over time.
As Jeff explained, “Your income statement shows earnings, cash flow reveals the movement of cash, and the balance sheet captures your financial position at a moment in time.” This level of financial visibility is key not just for internal planning, but for proving to investors that you understand how your business runs and scales.
He also broke down how to build a marketing-driven revenue model. If you know your ad spend, click-through rate, and conversion rate, you can forecast how many customers you’ll acquire and what revenue you can expect.
Blending strong financial modeling with marketing insights helps founders turn strategy into results. It’s not just about tracking spend – it’s about understanding how spend turns into growth. That kind of clarity signals to investors that you’re not just hoping for scale; you’re planning for it.
Expert Support, Not Just Software
Building a startup is tough enough without trying to become a spreadsheet expert overnight. For founders looking to stay focused on growth while still keeping their numbers in check, the right financial partner can be a game-changer.
That’s where Forecastr comes in. More than just another tool, it combines intuitive software backed by hands-on analyst support to help you build a clear, reliable financial roadmap. “We want founders to focus on running their business, not wrestling with spreadsheets,” Jeff explained.
With ready-to-use templates, dashboards, and dedicated analysts, Forecastr helps startups stay on track and make smarter decisions. And if you’re a Grasshopper client, you’ll unlock added benefits like a 20% discount in your first year and 10 free hours with a Forecastr analyst.
“It’s a powerful way to get CFO-level guidance without the full-time cost,” Rob noted.
Helping Founders Build Better Businesses
Rob closed the session with a reminder that Grasshopper is here for more than just banking. “We’re in this to help founders succeed. Whether you’re raising your first round or scaling fast, we want to be your partner, and not just your bank.”
With the right tools and mindset, your financials can become one of your startup’s greatest assets. Understand them. Use them. Build with them.
Keep the Momentum Going
The conversation doesn’t stop here! Whether you want to revisit key takeaways or explore the tools mentioned in more detail, we’ve got you covered. Access the full webinar recording on demand, reach out to Rob Burnett and Jeff Erickson directly on LinkedIn, or dive into the exclusive perks available to Grasshopper startup clients in our marketplace. Perks can be easily claimed through online or mobile banking.
And if you’re hungry for more insights like these, more founder-focused webinars are coming soon, so be sure to subscribe to our newsletter so you can stay informed and take advantage of future opportunities.
By Julia Larkin in Business BankingStartups
