Financial Concepts Every Entrepreneur Needs to Know, Before You Get Investors.

Behind every great pitch deck lies great financial clarity.

A great idea might get you applause.

But great numbers? They get you investment.

Most founders walk into pitch rooms with passion, confidence and fancy presentation slides. The pitch is ready, but are you? The moment an investor asks, “What’s your burn rate?”  the silence in the room is much louder than their pitch…

That’s the moment investors stop seeing your dream and start seeing risk.

Because investors don’t just invest in ideas, they invest in founders who understand their business, IN AND OUT!

Financial Clarity is your strongest Pitch, Fundraising isn’t about impressing investors. It’s about earning their trust. It shows you’re not just passionate, rather you’re prepared.

Yes, Finance might feel scary at first. But once you break it down, it’s just simple logic.

Now here’s what you need to understand before walking into that next investor meeting:

1. Burn Rate :

Burn rate means how much money your startup spends every month.

If you spend ₹5 lakh and earn ₹2 lakh, your burn rate is ₹3 lakh. A controlled burn with visible growth means progress.

‍2. CAC (Customer Acquisition Cost) :

CAC means how much it costs to get one customer.

If you spend ₹10,000 on marketing and get 100 customers, your CAC is ₹100.

If your CAC is too high, your business won’t grow easily , because you’ll spend too much to earn too little.

3. Valuation (Pre & Post Money):

Investors will always ask: “What’s your startup worth?”

Pre-money valuation is what your company is worth before funding.

Post-money valuation = Pre-money + Investment amount.

4. Cash Flow:

It’s not just about profits — it’s about timing of money.

Cash Flow = Money In - Money Out.

Even profitable startups die if they run out of cash too soon.

5. Runway:

Runway is your startup’s time left before it runs out of fuel. It tells you how many months you can keep running with the cash you have, based on your current monthly burn. If you’ve got ₹12 lakhs in the bank and spend ₹2 lakhs a month, your runway is six months

6. EBITDA :

EBITDA — Earnings Before Interest, Taxes, Depreciation, and Amortisation,  basically shows how much your business really earns from operations before any external or accounting charges kick in. If your EBITDA is positive, your core business is solid. If it’s negative, you’re running on hype, not health.

A founder who can explain what each number means earns credibility instantly. Every founder should be able to explain:

• How much money is coming in?
• How much is going out?
• How long can you survive without funding?
• What happens once you get funding?

When you talk numbers, you talk sense. Of course, not every founder has a finance background, which is absolutely fine. Investors look for clarity and the ability to fix something you don’t know. Get someone in your team who understands finance, get that expert help and speak what your investor wants to hear..

Your startup or idea might get you in the room with investors, but your clarity and numbers will make you own that room. So yes, If you can’t explain your numbers, you’re not ready to raise funds.

And if you can, you won’t have to convince anyone you’re the right founder. The numbers will speak louder than your pitch ever could.

Before You Raise Funds, Raise Your Financial IQ.

At 18startup we provide you with Finance for Founders , a self learning module, where all Startup founders can build your financial projections, that too in just 1 hour.

Now that you know the importance of finance, Check out the program right away at.

Link- FINANCE FOR FOUNDERS

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