Accounting
What numbers do you need to know and hit?
It is easy to say the right things. It is hard to consistently do the right things and do them well. The numbers are where credibility gets measured, not described.
Operating Metrics
Portfolio-level targets. Every number has an assumption and a conviction level.
| Metric | Threshold | Conviction | Why It Matters |
|---|---|---|---|
| Monthly burn | < $2K/mo aggregate | HIGH | Known fixed costs — hosting, domains, tooling |
| Runway | > 12 months | HIGH | Cash balance / monthly burn |
| Revenue quality | > 60% recurring | NONE | Pre-revenue — no data yet |
| LTV:CAC | > 3:1 | NONE | Requires first customers |
| Gross margin | > 60% | MEDIUM | AI-heavy delivery = low COGS assumption |
$0 actual across the board. That's honest — experiments not yet run. The burn rate is the cost of staying ready.
Unit Economics
Each venture defines its unit differently. The margin tells you whether the model works at scale.
| Venture | Unit | Revenue/Unit | COGS/Unit | Margin | CAC | Stage |
|---|---|---|---|---|---|---|
| berleytrails | Client engagement | TBD | TBD | TBD | TBD | Planning |
| stackmates | Platform subscription | TBD | TBD | TBD | TBD | Planning |
| prettymint | Creative project | TBD | TBD | TBD | TBD | Planning |
| dreamineering | Advisory session | TBD | TBD | TBD | TBD | Planning |
TBD is not failure. It's the gap between the story loop and the market loop. The inner loop (tests green, gates hold) is tight. The story loop (predictions with conviction) is filling in. The market loop (someone pays) hasn't started.
The Flow
Financial operations sit in the third stage of the business flow.
Development → Strategy → Operations → Growth → Feedback
- Development validates the pain exists — no point counting money nobody will pay
- Strategy positions the offer — unit economics depend on pricing decisions made here
- Operations runs the numbers — burn, runway, margin, cash flow
- Growth compounds what works — reinvestment requires knowing what earns
Performance
Key financial ratios to monitor:
| Ratio | Formula | What It Reveals |
|---|---|---|
| Gross profit margin | (Revenue - COGS) / Revenue | Can the unit economics sustain the model? |
| Current ratio | Current assets / Current liabilities | Can you pay what's due? |
| Return on investment | Net profit / Total investment | Is the capital earning its keep? |
Records
Three financial statements — each answers a different question:
- Income Statement — Is the venture profitable over this period?
- Balance Sheet — What's the financial position right now?
- Cash Flow Statement — Where did the cash go?
Operating cash flow is the signal: can the venture generate enough to strengthen the platform without external funding?
Operational Depth
The right tools, processes, and people change as the venture scales.
- Treasury — Cash management, banking, capital risk
- Capital Allocation — Where to reinvest
- Fundraising — When external capital makes sense
- Crypto Operations — On-chain treasury management
- Accounting Cycle — The compliance backbone
Commercial vs Compliance
| Business Procedure | Commercial Focus | Compliance Focus |
|---|---|---|
| Budgeting and Forecasting | Preparing budgets, forecasting revenues and expenses | Ensuring budgeting and forecasting processes comply with accounting standards |
| Financial Reporting | Preparing internal financial reports for management decision-making | Preparing financial statements in compliance with accounting standards for external stakeholders |
| Financial Analysis | Analyzing financial performance and identifying trends | Ensuring accounting systems and records are accurate and complete |
| Strategic Planning | Participating in strategic planning and decision-making | Providing input on compliance issues related to strategic plans |
| Capital Structure Management | Managing the company's debt and equity mix, investment decisions | Ensuring capital structure decisions comply with relevant laws and regulations |
| Risk Management | Identifying and managing financial risks | Implementing internal controls to mitigate financial and compliance risks |
| Transactional Activities | Managing cash flow, receivables, payables | Ensuring transactions are recorded accurately and timely, in compliance with accounting standards |
Context
- Ventures — The portfolio these numbers serve
- Scoreboard — Measurement across all dimensions
- Business Factory — The golden path from friction to compound
- Business Models — Model selection shapes unit economics
- Credibility — Three loops: inner (tests), story (predictions), market (revenue)
- Trust — Trust built through validating outcomes match expectations
- SaaS Decisions — Technology choices that affect cost structure
Questions
What number would change your next decision — and how confident are you in that number?
- Which metric in the operating table above would shift your conviction about whether to activate the first venture?
- Which unit economics assumption is a prediction that needs market evidence — not more analysis?
- If burn rate is the cost of staying ready, what signal tells you to stop paying it?