Gains:
- Ability to understand the concepts of unit economics (CAC, LTV, contribution margin), cash flow and runway and establish a draft model with artificial intelligence
- Ability to use AI to draft assumption table, scenario (optimistic/realistic/pessimistic) and break-even analysis
- Ability to understand that financial projections are only as good as assumptions, and that financial decisions and figures presented to investors require expert approval and honesty.
The harshest truth of a startup is this: when the money runs out, the business ends, no matter how good the product is. So the founder has to understand the digital skeleton of the business — where the money comes from, where it goes, when it ends. In this unit, we will learn the basic concepts of the financial model (a table that predicts the income, expenses and cash flow of the business in numbers) and use AI (artificial intelligence) to build a draft model. But a very clear line from the beginning: A financial projection is only as good as the assumptions underlying it; Financial decisions and figures presented to the investor require the approval of a competent expert such as a financial advisor and absolute honesty. AI is just a draft and calculation assistant here.
Unit economics: is there profit in one customer?
Unit economics shows whether the business makes a profit from a single customer. If what you earn from a customer is less than what you spend to acquire and serve them, the more customers you take on, the faster you will fail. Three basic concepts:
- CAC (Customer Acquisition Cost): Average money spent to acquire a customer (advertising, sales, marketing expenses ÷ number of customers acquired).
- LTV (Lifetime Value): The total net value a customer brings during the time they are with you.
- Contribution margin: The remaining share from a sale after variable costs directly related to that sale are subtracted.
The general rule of thumb for a healthy business: the LTV/CAC ratio should be roughly 3 or higher — meaning what you earn from the customer is at least several times what it cost to acquire them. If the ratio is close to 1, the business model is losing money. Another important metric is the CAC recovery period (how many months it takes for the customer to recover its cost of acquisition) — being short is vital for cash.
Cash flow and runway
Cash flow is the movement of money in and out of your account over time. Making a profit is one thing, having cash in the safe is another; Many "seemingly profitable" ventures fail because they cannot manage cash. Runway is how many months you can last with the available cash at a monthly burn rate: Runway = Cash in the safe ÷ Monthly net burn. This single number is the number that the founder must have in his mind at all times; because "when should I find money or make a profit?" is the answer to the question.
Tip: Update Runway every month and keep it with two scenarios: how many months if revenue never increases, how many months if revenue goes according to plan. The difference between the two numbers indicates how much risk you are at. When the runway is below 6 months, it is time for urgent action.
Projection: as good as assumptions
Financial projection predicts the future, but the future is unknown; Therefore, the projection is not a "final result" but a "chain of assumptions". The right approach is not a single number, but three scenarios: pessimistic (if things go bad), realistic (most likely), optimistic (if everything goes well). There should be assumptions clearly listed under each scenario: price, new customers per month, churn (percentage of customers leaving), costs. Seeing how the result changes when you change the assumption (sensitivity analysis) is the real value of the model. The break-even point — the moment when revenue meets expenses — is the critical threshold indicated by every projection.
Step by step: Draft model with AI
- Collect assumptions. Price, CAC, new customers per month, churn, fixed/variable costs.
- Have the AI set up a draft table. But ask each cell to display its formula (for manual validation).
- Calculate unit economics. CAC, LTV, LTV/CAC, recovery time.
- Generate three scenarios. Pessimistic/realistic/optimistic; List assumptions separately.
- Runway and find breakeven. How many months will it last and when will it become profitable?
- Verify manually. Check the formulas for yourself; Then take it to a financial advisor.
Note: The AI may make mistakes in arithmetic and choose "optimistic" assumptions on your behalf. Ask for each result with its formula and do at least a few key calculations yourself.
three mini cases
Case 1 — Hidden harm. One founder was happy to get 100 customers a month. When he calculated the unit economics with AI, he saw that the CAC was 400 TL and the first year LTV was 250 TL; LTV/CAC was ~0.6. Every customer was losing money; As it grew, it sank faster. He decided to slow growth until he could fix price and retention. Numbers turned joy into reality.
Case 2 — Runway warning. A team felt comfortable with 600,000 TL in the safe. He calculated his monthly net savings (85,000 TL) with YZ and found the runway: ~7 months. This meant "we should start looking for investment immediately" because the investment process also takes months. Thanks to early warning, they started negotiations before the money ran out. Without the number, they would be late.
Case 3 — Optimistic assumption trap. A founder asked the AI for projections; The AI assumed churn of 2% and monthly growth of 30% and the picture came out amazing. When the founder questioned the assumptions, he saw that they did not match the actual data (churn 8%, growth 10%). With realistic assumptions the model was very different. If he had presented the optimistic picture to the investor, he would have lost confidence at the first inquiry. He reconstructed it with honest assumptions.
Four copyable templates
1) Assumptions table:
Your role: financial model assistant (final approval goes to my financial advisor). Put these assumptions in a neat spreadsheet and ask for any missing ones: price, new customers per month, churn% per month, CAC, variable cost per unit, fixed expense per month. Don't make up any numbers without giving them permission; Leave it blank and write "must be entered".
2) Unit economy calculation:
Calculate unit economics with the following data and show EVERY formula:price=[x], variable cost=[y], monthly churn=[z]%, CAC=[k].Calculate: contribution margin, average customer life (1/churn), LTV,LTV/CAC ratio, CAC recovery time. Interpret the ratio (healthy threshold ~3). Write down the intermediate steps so I can verify the arithmetic manually.
3) Projection with three scenarios:
Set up 3 scenarios for 12-month income-expense projection: pessimistic / realistic / optimistic. List the assumptions of each scenario (growth%, churn%, price) SEPARATELY and clearly. Don't present a single "exact" number. Mark the break-even month for each scenario. State that this is an estimate and requires financial advisor approval.
4) Runway account:
Cash in the safe = [x] TL, monthly income = [g] TL, monthly expense = [gd] TL. Calculate the monthly net profit and runway (month). If revenue does not increase at all and revenue increases [..]% monthly, give two separate runways. Briefly tell me what I should do if the runway goes below 6 months.
Weak prompt / Strong prompt
Weak prompt:
Give me a 5-year income projection, make it look good.
This prompt produces a “dream picture” that hides assumptions, is optimistic, and cannot be verified—the most dangerous document before the investor.
Powerful prompt:
Your role: financial model assistant. Establish a 12-month 3-scenario (pessimistic/realistic/optimistic) projection with the following assumptions: List the assumption of each scenario separately, show all formulas, calculate the breakeven month and runway. Don't make up the numbers; note that this is a draft that requires financial advisor approval.
concept
What measures
healthy sign
CAC
Customer acquisition cost
Low and decreasing
LTV
Customer's total return
multiple of CAC
LTV/CAC
Profit logic of the business model
~3 and above
Runway
How many months will it last?
6+ months, monitored
Churn
Customer churn rate
low
Common mistakes
- Bypassing unit economics. If a single customer suffers a loss, growth accelerates bankruptcy.
- Leaning on the optimistic assumption. Rosy assumptions made by the AI or yourself make the model a liar.
- Confusing profit with cash. Appearing profitable but going bankrupt without cash; Runway is a must watch.
- Not validating formulas. AI can make mistakes in arithmetic; manually check key accounts.
- Bypassing expert approval. Figures sent to investors/taxes require financial advisor approval.
Caution: Even the slightest exaggeration in a financial model presented to the investor — inflated growth, disguised churn, unfounded market share — when discovered, destroys all confidence and, in some cases, creates legal liability. Produce drafts quickly with AI, but make each figure defensible with honesty, source, and expert validation. The model is not a tool for persuasion, but a tool for understanding reality.
In summary
If the money runs out, the job ends; Therefore, the founder must understand the digital skeleton of the business. Unit economics (CAC, LTV, contribution margin) indicate whether there is profit on a single customer; It is healthy for the LTV/CAC ratio to be roughly above 3. Runway tells you how many months you can last with the available cash and should be known at any time. Projections are as good as assumptions; It should be established with pessimistic/realistic/optimistic scenarios and clear assumptions instead of single numbers. The AI draft table is a quick aid in unit economics and scenario generation; But its arithmetic must be verified, its assumptions must be chosen honestly, and financial decisions and investor figures must be approved by a competent expert.
Application task
Fill in the "Assumptions table" template with your own (or hypothetical) figures. Calculate CAC, LTV and LTV/CAC ratio with the "Unit economics calculation" template; Manually verify at least one account and comment on whether the ratio is healthy. Find out how many months you last with the "Runway calculation" template. Finally, make an outline using the "Three-scenario projection" template and write down in 5 items which assumptions are the most critical and how you will verify them before taking them to a financial advisor.
checklist
- [ ] Have I calculated and interpreted unit economics (CAC, LTV, LTV/CAC)?
- [ ] Did I find Runway and rate it against the 6 month threshold?
- [ ] Did I use three scenarios and explicit assumptions instead of a single number?
- [ ] Have I manually verified the AI's arithmetic and assumptions?
- [ ] Have I subjected financial decisions and investor figures to expert approval?