What if I do not have revenue yet?

Then runway is the number that matters most, and the others become plans rather than results. Show the board the assumptions behind each one, and start computing them the month the first customer pays.

Should I report bookings or ARR?

Report ARR as the headline and show bookings beside it if they differ. Bookings count signed contracts; ARR counts the recurring value live today.

Board fluent basics

The five numbers every board asks for

These five numbers tell an investor whether the company is growing, whether customers stay, whether each sale makes money, how long the cash lasts, and how fast new customers pay back what they cost. Learn them before the meeting, compute them the same way every quarter, and most board questions get easier.

Recurring revenue and its growth

Annual recurring revenue (ARR) is the yearly value of the subscriptions you have today, not the cash you collected this month. Boards want the level and the growth rate, and they want one-time fees and services kept out of it. Monthly recurring revenue (MRR) is the same idea per month.

Retention

Net revenue retention (NRR) says how much revenue last year's customers bring this year, after upgrades, downgrades, and cancellations. Gross revenue retention (GRR) leaves upgrades out, so it shows the leak on its own. A company that keeps and grows its customers needs fewer new ones to grow.

Gross margin

Gross margin is the share of each revenue dollar left after the cost of delivering the product: hosting, support, third-party services, and any people who keep it running for customers. It tells the board whether growth makes the company stronger or just bigger. Founders who build on paid AI models and cloud services should know this number cold, because those costs grow with usage.

Burn and runway

Burn is the cash you spend each month beyond what you bring in. Runway is how many months the cash in the bank lasts at that burn. The burn multiple compares the burn to the new recurring revenue it bought, which tells the board whether spending is turning into growth.

CAC payback

Customer acquisition cost (CAC) is what sales and marketing spend to win one new customer. CAC payback is how many months of that customer's gross profit it takes to earn the cost back. Before you have a sales team, the honest answer may be that founders sell everything; say so, and count your own time.

Compute them the same way every time

The board does not need perfect numbers. It needs numbers defined the same way every quarter, so a change in the number means a change in the business, not a change in the spreadsheet.

Key takeaways

Recurring revenue and growth say whether the company is getting bigger.
Retention says whether customers stay and spend more.
Gross margin says whether each sale makes the company stronger.
Burn and runway say how long you have; CAC payback says how fast growth pays for itself.
Fixed definitions matter more than precision.

Questions founders ask

What if I do not have revenue yet?: Then runway is the number that matters most, and the others become plans rather than results. Show the board the assumptions behind each one, and start computing them the month the first customer pays.
Should I report bookings or ARR?: Report ARR as the headline and show bookings beside it if they differ. Bookings count signed contracts; ARR counts the recurring value live today.

Run the five numbers

Each calculator shows its formula, a worked example, and what the result means for the business. They are free and need no account.

Free calculators for the numbers in this lesson, each with its formula and a worked example.