Milestone map
Milestone map
3 milestones
Document cost structure and burn rate
1–2 weeks (5–8 hrs/week)
Pull every expense line from your accounting tool or bank statements for the last three months. Categorise into COGS, fixed costs, and variable costs. Build a simple unit economics model showing CAC, LTV, and gross margin per customer. Identify your largest cost driver and calculate what revenue level makes you cash-flow positive.
Proof required
Submit a monthly P&L for the last 3 months (you may redact sensitive figures to nearest $500) with expenses categorised, a unit economics table, and a one-paragraph explanation of which cost line you're attacking first and why.
What gets checked
- P&L clearly distinguishes COGS from operating expenses — a spreadsheet with a single 'costs' column doesn't pass.
- Unit economics model shows CAC and LTV from real acquisition and revenue data, not assumptions — cite the source rows.
- Break-even calculation uses your actual gross margin, not 100% margin — the math must close.
Common mistakes
- Treating founder salaries as zero when calculating burn — this hides the real cost of the business.
- Using industry-average benchmarks for CAC/LTV instead of your own cohort data.
- Break-even analysis that ignores variable costs scaling with revenue.
Resources
Foundationstart here
Depthgo deeper
What a verifier looks for
- Ask the founder to walk through the largest three expense lines and whether each one is fixed or variable.
- Check that gross margin is calculated correctly: (revenue − COGS) ÷ revenue, not (revenue − all expenses) ÷ revenue.
- Ask what one change would have the biggest impact on reaching break-even — if they can't answer clearly, the analysis hasn't been internalised.
- Who can confirm revenue: paying customers, or an accountant who has looked at the payment-processor screenshot. A co-founder alone is not enough.
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Cut or convert costs to reach break-even
4–8 weeks (dependent on your business cycle)
Execute the cost-reduction or revenue-optimisation plan from Milestone 1. This might mean cutting a vendor, renegotiating a contract, raising prices, removing a feature that costs more to maintain than it generates, or converting a fixed cost to variable. Document each change made and its P&L impact. The goal is reaching cash-flow breakeven in your target month.
Proof required
Submit: (a) a before/after P&L showing the impact of each change, with the month you hit break-even highlighted; (b) evidence of each cost change (e.g. vendor cancellation confirmation, price increase email to customers, new contract); and (c) a one-paragraph explanation of which change was hardest and why.
What gets checked
- Break-even is shown in actual bank/accounting records for at least one month — not a projection.
- Every claimed cost reduction has supporting evidence (cancellation email, invoice showing new rate, etc.) — not just asserted.
- Hardest-change paragraph shows real decision-making (trade-offs considered, customers lost, features cut) — not a feel-good narrative.
Common mistakes
- Achieving break-even by deferring real costs (e.g. not paying yourself, delaying server invoices) rather than structural reduction.
- Price increase that churned more customers than it retained — not a win if net revenue fell.
- Before/after P&L uses different accounting periods, making the comparison meaningless.
Resources
Depthgo deeper
What a verifier looks for
- Ask whether break-even was achieved in the accounting tool's records or only on paper — they should produce the actual month's bank statement or P&L export.
- Ask what they would cut next if revenue dropped 20% — this tests whether they truly understand their cost structure.
- Verify evidence for each claimed cost change is dated and specific.
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Sustain profitability for 90 consecutive days
3 months of operating the business
Demonstrate that profitability is structural, not a one-month anomaly. Maintain positive cash flow for at least three consecutive months while documenting month-over-month revenue, COGS, and operating expenses. Write a short founder reflection on which constraints changed your product decisions compared to being loss-making.
Proof required
Submit three consecutive months of P&Ls (from your accounting tool or bank statements) all showing net positive cash flow, alongside a one-page reflection on how profitability constraint changed at least one product or customer decision.
What gets checked
- All three P&Ls are from the same accounting system/period and show net cash positive after all real operating expenses.
- Reflection names a specific product or customer decision changed by the profitability constraint — not a generic 'we became more focused' statement.
- Revenue in month 3 is at least equal to or greater than month 1 — not declining profitability masking a contraction.
Common mistakes
- Profitability achieved by stopping founder compensation — this is cash-positive only in an accounting sense, not a real business.
- Reflection is abstract ('we learned to be lean') rather than specific — names no actual decisions changed.
- Revenue declining across the three months — profitability via contraction is survivorship, not product-market fit.
Resources
Foundationstart here
What a verifier looks for
- Ask the founder what the biggest threat to profitability is in the next quarter — their answer reveals whether they understand their cost/revenue dynamics structurally.
- Review all three P&Ls for consistency — same line items, same categorisation method.
- Ask for one decision they didn't make (feature they didn't build, hire they didn't make) because of the profitability constraint.
- Who can confirm revenue: paying customers, or an accountant who has looked at the payment-processor screenshot. A co-founder alone is not enough.
You'll sign in first, then come straight back here.
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