Description
Estimate one sales cycle’s working-capital gap after a customer deposit and acquisition spending.
Startup cash budgets distinguish available funds, committed outlays, restricted balances and expected receipts. Subtracting commitments can create a negative balance even while total cash remains positive; dividing by burn assumes a constant spending rate.
Estimate one sales cycle’s working-capital gap after a customer deposit and acquisition spending.
When to use this tool
Use Startup Sales Cycle Cash Gap Term when checking a supplied cash commitment, balance or runway contribution.
How to use the tool and how it works
- Enter deliveryCost, deposit, monthlyAcquisitionSpend, cycleMonths. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read workingCapital. Use the output convention below.
Require nonnegative deliveryCost, deposit, monthlyAcquisitionSpend and cycleMonths. Return workingCapital = deliveryCost-deposit+monthlyAcquisitionSpend*cycleMonths. Costs and deposits share a currency; the spending rate is currency per month.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| deliveryCost | Delivery Cost | Required. Finite number; minimum 0. |
| deposit | Deposit | Required. Finite number; minimum 0. |
| monthlyAcquisitionSpend | Monthly Acquisition Spend | Required. Finite number; minimum 0. |
| cycleMonths | Cycle Months | Required. Finite number; minimum 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| workingCapital | Working Capital | Required. Finite number. |
{
"input": {
"deliveryCost": 20000,
"deposit": 5000,
"monthlyAcquisitionSpend": 3000,
"cycleMonths": 2
},
"output": {
"workingCapital": 21000
}
}Limitations and assumptions
- Negative workingCapital is preserved when the deposit exceeds the modeled outlay. This is one cash-gap term, without full timing, collections, tax or financing arrangements.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Use a dated cashflow forecast and the actual funding or payment terms when timing, changing burn or enforceability matters.
References
Similar or alternative tools
- Startup Runway Committed Cash Adjustment
Calculate constant-burn cash runway after restricted funds and committed payments, preserving a signed shortfall.
- Startup Option Exercise Cash Base
Calculate cash needed to exercise a supplied option count, including fees and optional withholding.