Technology

Runway, cap table and board: the reporting an accountant does not produce

Nextica Law & Tax acts as the outsourced finance director of a tech company: a cash plan with runway calculated month by month and the scenarios that extend it, a cap table kept current and consistent with the commercial register and with instruments still to convert, monthly reporting to investors and the board on the same basis every month, budgeting by product and by team, and an honest reading of the metrics shown externally —acquisition cost, retention, real gross margin once infrastructure is deducted.

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The board asks about runway and the cap table. Standard bookkeeping answers neither question.

What's included

1. A month-by-month cash plan with collections on their real dates, committed payments, and decisions already taken but not yet paid for.

2. Calculating runway from that plan and not by dividing cash by last month's burn, which is how you find out too late.

3. Two standing scenarios

one with no new revenue and one with the cuts that would be triggered, each with its decision date.

4. A cap table kept current and consistent with the registry and with instruments still to convert, with the reconciliation between both versions done.

5. Monthly reporting to investors and the board on the same basis every month, so the series are comparable.

6. Budgeting by product and by team, with infrastructure cost allocated on an explainable basis.

7. An honest reading of the metrics shown externally

acquisition cost, retention and real gross margin once infrastructure is deducted.

THE BOARD ASKS ABOUT RUNWAY AND THE CAP TABLE

Standard bookkeeping answers neither, and both get asked for with a week's notice.

Runway calculated by dividing cash by last month's burn

it ignores payments that appear only once a year, collections that land later than the invoice date, and decisions already signed but not yet paid for. It is the calculation that makes you arrive late to the round.

A cap table out of line with the commercial register

they are two snapshots with different dates and scope —one shows what has been executed, the other includes what is committed and not yet converted— and both are needed, but a difference nobody can explain delays closing more than any other issue.

Metrics reported on a shifting basis

if the definition of an active customer or of gross margin moves between months, the series stops being comparable and the board loses the only tool it had for seeing the trend.

Frequently asked questions

How is runway calculated properly?

Not by dividing cash by last month's burn, which is how it is almost always done and how you end up finding out too late. A useful runway starts from a month-by-month cash plan with the three things that really move it: collections on their real date, not the invoice date; committed payments, including those that appear only once a year; and decisions already made but not yet paid for, such as a signed hire or infrastructure that scales with users. And it comes with two scenarios: one with no new revenue and one with the cuts that would be triggered, each with its decision date.

Why does the cap table drift away from the commercial register?

Because they are two snapshots with different dates and different scope. The register shows what has been executed and filed; the management cap table usually also includes what is committed but not yet converted: convertible notes, SAFE-type agreements, options granted and not exercised. Both are correct and both are needed, but you have to know which one you are showing. In a round or a due diligence both are requested, along with the reconciliation between them, and a difference nobody can explain delays closing more than any other issue.

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