The Startup Ideas Podcast
The best businesses are built at the intersection of emerging technology, community, and real human needs.
Speak Both Financial Languages
Understanding that business has two financial languages - cash (what's real for survival) and accrual (what looks good for investors) - and you must be fluent in both for different audiences and purposes
Decision Rule
Use cash basis for survival decisions (can we make payroll?), use accrual basis for growth and investor communications (what does our growth curve look like?)
How It Works
Cash basis shows immediate liquidity and survival capability. Accrual basis smooths out timing differences to show underlying business trends and growth patterns that investors care about
Failure Modes
Only tracking cash and missing growth trends for investors
Only tracking accrual and missing cash flow timing for survival
Not building bridge between the two when they diverge >20%
Confusing which language to use for which audience
Example Decision
“Company shows strong accrual revenue growth for investor update, but uses cash flow analysis to decide whether to hire new engineer this month based on actual payment timing from customers.”