Can You Do Back-of-Envelope Maths?

Why It Matters

If a founder gives an investor numbers that don't add up, it raises an immediate red flag — not just about the numbers, but about how clearly that founder is thinking about their business.

Being able to do quick mental arithmetic about your company's finances is a credibility signal. Founders who have to look up their own numbers in a meeting lose trust fast.

The Quick Runway Test

Jason Calacanis uses a simple three-question check when meeting founders:

1. How much revenue do you generate per month?
2. How many full-time employees do you have?
3. How much have you raised so far?

From those three numbers, an experienced investor can estimate burn, runway, and whether the business is being run efficiently — in under a minute.

Numbers You Should Know Cold

Always be able to state, without hesitation:

• Your two-week payroll cost — this is your single largest recurring obligation
• Your last three months of revenue — so you can describe your trajectory, not just a single data point

Knowing these off the top of your head signals that you are close to your business and in control of it.

The Rule of 72

A useful mental shortcut for estimating how long it takes for a value to double:

Divide 72 by the annual growth rate (%) to get the approximate number of years to double.

Example: A business growing at 10% per year will double in approximately 7.2 years.

It works for revenue, investment returns, or any compounding metric. The Rule of 72 is a fast sanity check — use it to test whether a growth projection is realistic before you put it in front of an investor.