The numbers investors actually ask for

Every founder has had the moment: the investor or grant assessor leans in and asks, 'So what's your burn?' If the answer involves opening three spreadsheets and saying 'roughly', the meeting changes tone. The good news is that the numbers investors actually ask for are a short list - and every one of them comes straight out of a clean Xero file.

1. Burn rate

How much cash you spend each month, net of revenue coming in. Not your bank balance movement (that includes loans, capital injections and GST you owe) - the real operating number. Investors want the monthly figure and the trend: is burn rising, flat or falling? In Xero this comes from your P&L, adjusted for non-cash items, which only works if the file is reconciled and coded consistently.

2. Runway

Cash in the bank divided by monthly burn: how many months until you're out of money. It's the first number on every investor update for a reason. A runway figure built on an unreconciled bank account is worse than no figure at all, because everyone in the room will make decisions off it.

3. MRR / ARR (for subscription businesses)

Monthly recurring revenue, and its annualised cousin. Investors look at the growth rate and the quality: is it genuinely recurring, or is a chunk of it one-off implementation fees dressed up as MRR? The honest version lives in your revenue coding - if every sale lands in one 'sales' account, you can't split recurring from one-off, and that question always gets asked.

4. Gross margin

Revenue minus the direct cost of delivering it. For software this should be high; for services-heavy startups it's lower, and that's fine - but you need to know yours, because it tells an investor how the business scales. If your hosting, contractors and delivery costs aren't coded to cost-of-sales accounts, your gross margin is a guess.

5. Revenue vs cash (and why they differ)

Annual contract paid upfront? That's cash now, revenue over twelve months. Invoice issued but unpaid? Revenue, not cash. Investors probe this gap because it reveals whether growth is funded by customers or by hope. Getting it right needs correct revenue recognition in the file - another job that only works on clean books.

The pattern underneath all five

None of these numbers live in a spreadsheet you maintain at midnight. They all fall out of a Xero file that is reconciled monthly, coded to a sensible chart of accounts, and closed properly each month. Founders who can answer investor questions in one email do less preparation, not more - their books already carry the answer.

A word on data rooms

If you're heading into a raise or a grant application, expect to be asked for monthly P&Ls, balance sheets and a cashflow forecast going back at least 12 months. Assembling that retrospectively from a messy file is slow and expensive. Running it off clean monthly closes is a Tuesday morning. This is exactly the gap our Growth and Partner plans are built for - month-end close, management pack, and investor-ready reporting from a CPA, a few days a month.

Not sure your file could answer these questions today? Start with the free Xero Health Check - 15 checks, about 20 minutes, and you'll know exactly where you stand before anyone asks.