Boards and investors ask for a short list, and then they ask what you meant. The four that show up first in a UK seed conversation are burn, runway, recurring revenue and how long it takes to earn back the cost of winning a customer. None of them has a single statutory definition. Companies House does not file your MRR. The value is that you pick a definition, keep it, and make it agree with the management accounts.

If the pack and the model use different versions, you do not have four KPIs. You have an argument. The monthly pack those numbers should live in is described in management accounts for startups.

Burn

Burn is cash leaving the company faster than cash is arriving, measured over a month. Say which one you are using.

Gross burn is operating cash going out, before revenue. It tells you the size of the cost base. Net burn is cash out minus cash in from customers. It tells you how fast the bank balance falls if nothing else changes. Financing cash - a drawdown on a loan, a new share issue - is not revenue and should not reduce “burn” in the operating sense. Show it in the cash flow so the bank movement still ties.

Use a closed month, or an average of the last three closed months if one month was distorted by an annual bill. Say which. A burn figure that includes next quarter’s hiring plan is a forecast. Call it a forecast.

Depreciation and option charges move profit without moving cash. If you quote burn from the profit and loss, the bank statement will disagree. Start from cash.

Runway

Runway is how long the cash you have will last at the burn rate you just defined. The plain version is cash divided by monthly net burn, expressed in months.

State the assumptions in the same sentence as the number. Which cash: the balance today, or today minus the VAT and PAYE you already know you will pay? Which burn: last month, or the average, or the plan? If revenue is expected to cut net burn in half by month four, that is a different runway from the one that assumes revenue stays where it is. Show both, or show the conservative one and put the hopeful one in the model.

Runway is not a moral score. A company with four months of cash and a round that is actually in process is in a different position from a company with four months of cash and no process. The KPI does not capture that. The commentary has to.

A runway that only works because the model adds an undated fundraise is a wish. Put that raise on a separate case.

MRR

Monthly recurring revenue is the recurring part of what customers pay you, stated as a month. It is not cash collected, and it is not always the revenue you recognise under your accounting policy. Those can be three different numbers. If you put one of them in a board pack, name it.

A bridge is more useful than a single total: opening MRR, new, expansion, contraction, churn, ending. Contraction is a price or seat reduction that is not a full cancellation. Churn is the logo or the contract that ended. Mixing them hides whether you have a sales problem or a retention problem.

Annual contracts billed up front are a particular trap. The cash arrives in one month. The recurring revenue, if you mean the contracted monthly equivalent, is a twelfth. The accounting revenue may be recognised over the contract. Deferred income on the balance sheet is the clue that you have already been paid for work you have not done. If MRR goes up and deferred income does not, ask why before an investor does.

One-off services, setup fees and grants are not MRR. Put them in a line called what they are. Usage fees can be recurring in spirit and lumpy in fact. If you include them, show the volatility instead of smoothing it into a trend you cannot repeat.

CAC payback

CAC is the cost to acquire a customer. Payback is how many months of gross profit from that customer it takes to cover that cost.

Write the fraction. Numerator: the sales and marketing cost you are including. Decide whether that is paid media only, or media plus the people who sell, plus the tools. Denominator: the gross profit from a new customer in a month, not the revenue, unless your gross margin is so close to 100% that you say so. Gross profit means after the direct cost of serving them. A payback calculated on revenue flatters a low-margin business.

The result is a number of months. What is “good” depends on how long customers stay, how expensive the cash is, and whether expansion revenue shows up later. A payback of a few months in a product people cancel quickly is not a healthy business. A longer payback in a contract that renews for years can be. There is no universal month-count on GOV.UK for this, and there should not be one in your board pack copied from a different model.

If you cannot yet split acquisition cost from everything else the team does, do not publish a payback figure. Publish the spend and the new customers, and say the payback is not reliable yet. A precise number built on a mushy numerator is worse than a gap.

How to put the four on one page

One page is enough for a seed board:

  • Cash at the close date, and the bills you already know are due.
  • Net burn, with gross burn beside it, and the months in the average.
  • Runway in months, with the sentence of assumptions.
  • Ending MRR and the bridge, or “not a subscription business” and the revenue you do have.
  • New customers and acquisition spend. Payback only if the definition is stable.
  • Three lines of commentary.

Tie every actual to the last closed month in the ledger. The forecast can sit in the model. Investor-ready books are what make that tie-out possible. If the KPI page cannot be traced to the bank, it will not survive the second meeting.

Finox builds that page inside Founder Finance, with the close, typically at £750–1,250 a month. The definitions are yours; we will not invent a benchmark and call it a target. If you want them looked at before a board meeting, book a 30-minute call and we will tell you whether the page is ready or only decorative.

Frequently asked questions

Should burn include VAT and payroll taxes?

Net burn should reflect cash that actually left, so VAT paid and PAYE paid are in the cash movement. If you quote an “operating burn” before those payments, label it. The mistake is mixing the two without saying which month the tax bill hits the bank.

Is runway cash divided by last month’s burn?

That is the simplest version, and it is acceptable if you say so. If last month was unusual, use a short average of closed months and say that instead. Do not divide by a burn number that already assumes the revenue you have not signed.

What do we do if we do not have MRR?

Do not invent it. Report recognised revenue, cash collected, and contracted revenue still to be delivered, clearly named. MRR is for recurring contracts. A services firm that forces a subscription metric is harder to diligence, not easier.

Is there a correct CAC payback in months?

No single figure is “correct” across companies. Calculate months of gross profit required to recover a defined acquisition cost, keep the definition stable, and explain retention next to it. A copied benchmark from another sector will not answer a follow-up question about your margin.

Where should these sit relative to statutory accounts?

They are management information. Statutory accounts are the annual filing described on GOV.UK. The KPI page should not contradict the ledger those accounts will eventually come from. It does not replace the filing.

General information for UK founders, not advice on your own facts. Tax and company-law rules change. Check the linked GOV.UK pages and take advice before you rely on a figure.