You don't need a model, you need two numbers
Lesson 13 already flagged that elaborate financial modeling at pre-seed produces false precision. What's actually worth checking is simpler: burn rate, how much cash the company spends per month, and runway, how many months of cash remain at that burn rate before the company needs to raise again or run out. Both are quick to ask for directly, and a founder who can't answer immediately, with a real number, is itself a signal worth noting.
Worked example
A company raising $750k at pre-seed reports current monthly burn of $45,000 and $120,000 already in the bank before this round closes.
| Cash | Runway at current burn | |
|---|---|---|
| Before this round | $120,000 | ~2.7 months |
| After this round closes | $870,000 | ~19.3 months |
What to actually flag
Under 12-18 months of runway after your round closes is worth a direct question: what does the plan look like if the next raise takes longer than expected, a real risk given that fundraising timelines routinely slip. Also worth asking: does burn increase after this round, most founders plan to hire, which raises burn and shortens the runway estimate above unless it's built into the number they gave you. A founder without a clear, current answer to "what's your runway" has either not been tracking it closely or is avoiding the question, neither is a great sign this early.
Checkpoint
- Burn rate and runway are the two numbers worth checking directly; elaborate modeling isn't necessary at this stage.
- Under 12-18 months of post-round runway is worth a direct follow-up question about the plan if the next raise slips.
- A founder without a clear, current runway number is itself a mild signal worth noting.
If anything here still feels unclear, ask before moving to Lesson 18.