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Stuff Every Founder Should Know

Running and growing a US company: cash flow, pricing, hiring, IP, fundraising, equity, privacy rules and SBA loans.

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  1. How can a profitable business still run out of cash?
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    Customers have not paid yet. Accrual profit can include sales that customers have not paid yet. Bills still require available cash, so a profitable company can face a cash shortage.

  2. Which statement shows whether a business earned a profit?
    Show the answer

    Profit and loss statement. A profit and loss statement measures revenue and expenses for a month, quarter, or year. Their difference shows profit or loss for that period.

  3. What does cash flow measure?
    Show the answer

    Cash received and cash paid. Cash flow focuses on actual movement of cash. Positive net cash flow means more cash came in than went out during the period.

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  1. How can a profitable business still run out of cash?
  2. Which statement shows whether a business earned a profit?
  3. What does cash flow measure?
  4. How does a cash flow projection differ from a statement?
  5. In the FDIC Money Smart cash flow projection, where does an equipment purchase go?
  6. What becomes next month's opening cash?
  7. What is the main purpose of a cash flow projection?
  8. What does monthly burn rate usually measure?
  9. How do founders estimate cash runway in months?
  10. How is gross profit calculated for a product business?
  11. What number is the denominator in gross margin percentage?
  12. A $100 item sells for $150. What is its markup on cost?
  13. What is the starting point for cost-plus pricing?
  14. What most directly guides value-based pricing?
  15. What happens at the break-even point?
  16. How do you calculate break-even units for one product?
  17. What is contribution margin per unit?
  18. What does customer acquisition cost measure?
  19. What should customer lifetime value estimate?
  20. How is the LTV to CAC ratio calculated?
  21. What does accounts receivable represent?
  22. Which detail belongs on a useful customer invoice?
  23. What is the maximum standard SBA 7(a) loan amount?
  24. Where does a business submit a normal SBA 7(a) application?
  25. What is the maximum SBA 504 loan amount?
  26. Which need cannot normally be financed with an SBA 504 loan?
  27. What is the maximum SBA microloan?
  28. Which owners must provide an unlimited personal guaranty for covered SBA loans?
  29. What does SBA Lender Match do?
  30. What must a small business recordkeeping system clearly show?
  31. How long should records supporting a bad debt deduction be kept?
  32. What should customer terms clearly explain before acceptance?
  33. Why should a customer contract define scope and deliverables?
  34. What does a limitation of liability clause try to do?
  35. The IRS sorts evidence about whether a worker is an employee into which three categories?
  36. A worker does your tasks from home, but you control what they do and how. To the IRS, they are usually what?
  37. How many IRS factors must point to "employee" before a worker counts as an employee?
  38. Who can file IRS Form SS-8 to ask the IRS to decide if a worker is an employee or a contractor?
  39. If you treat an employee as a contractor with no reasonable basis, what can the IRS hold you liable for?
  40. Under the Labor Department's economic reality test, what is the main question about a worker?
  41. You pay a worker on a 1099 and they sign a contractor agreement. Does that make them a contractor under the FLSA?
  42. What does a new employee's Form W-4 tell the employer?
  43. A new employee never turns in a completed Form W-4. How must the employer withhold federal income tax?
  44. After an employee signs Form W-4, what does the employer do with it?
  45. By when must a new employee fill out Section 1 of Form I-9?
  46. How long does an employer have to complete Section 2 of Form I-9 after a new employee starts work?
  47. How long must an employer keep a former employee's Form I-9?
  48. After you complete a new hire's Form I-9, where does it go?
  49. What does E-Verify do?
  50. Under federal law, which employers must use E-Verify?
  51. Under Arizona law, which employers must use E-Verify after hiring an employee?
  52. If you use E-Verify, by when must you create a case for a new employee?
  53. Below the Social Security wage cap, what is the employer's combined Social Security and Medicare tax rate?
  54. When must an employer start withholding the 0.9% Additional Medicare tax from an employee?
  55. With the full credit for state unemployment taxes, what is the federal unemployment (FUTA) tax rate?
  56. Most employers report withheld income tax plus Social Security and Medicare on Form 941. How often is it filed?
  57. Who may face the Trust Fund Recovery Penalty for willfully unpaid payroll taxes?
  58. By when must employers give employees their Form W-2 for 2026 wages?
  59. Under federal law, how soon must an employer report a new hire to the state?
  60. The federal minimum wage is $7.25 an hour. If your state's minimum wage is higher, which do you pay?
  61. Under the FLSA, when does a nonexempt employee earn overtime pay?
  62. A nonexempt hourly employee works 50 hours one week and 30 the next. How many overtime hours are owed?
  63. You give an employee the title "Manager" and pay a salary. Does the title alone make them exempt from overtime?
  64. If federal tip-credit rules are met, what is the lowest cash wage for a tipped worker?
  65. Under the FLSA, how long must employers keep payroll records?
  66. A worker at a private company is hurt on the job. Whose workers' compensation system usually handles the claim?
  67. A contractor won't give you their taxpayer ID on Form W-9. What must you withhold from their payments?
  68. Which IP right identifies the source of goods or services?
  69. How long can a federal trademark registration stay alive?
  70. What does copyright protect?
  71. How long does copyright usually last for a modern individual work?
  72. Which patent type covers a new and useful machine or process?
  73. What is the usual maximum term of a utility patent?
  74. What makes business information a trade secret?
  75. How long can trade secret protection last?
  76. How long does a U.S. provisional patent application stay pending?
  77. What U.S. grace period may cover an inventor's own public disclosure?
  78. When is an employee's creation generally a work made for hire?
  79. What should founders and contractors sign to transfer copyright to the company?
  80. What does bootstrapping a business mean?
  81. Does calling a sale a friends-and-family round create a securities exemption?
  82. What does vesting do to a startup equity grant?
  83. What usually happens at a one-year cliff on four-year vesting?
  84. What timing does an 83(b) election choose for restricted property income?
  85. What is the federal deadline for an 83(b) election?
  86. What income can qualify an individual as an accredited investor?
  87. What net worth test can qualify an individual as accredited?
  88. Which Regulation D route bars general solicitation but may include sophisticated nonaccredited investors?
  89. What distinguishes a Rule 506(c) offering?
  90. When is Form D due for a Regulation D offering?
  91. What does Regulation Crowdfunding allow an eligible company to do?
  92. Which federal law requires businesses to live up to their privacy promises?
  93. How quickly must a sender honor a CAN-SPAM opt-out request?
  94. Which children trigger COPPA's core online privacy protections?
  95. What must an influencer disclose about an unexpected brand relationship?
  96. What does the FTC Safeguards Rule require covered financial businesses to maintain?
  97. What best distinguishes an angel investor from a VC fund?
  98. What does an investor receive under a SAFE?
  99. How does a convertible note differ from a SAFE?
  100. What does a SAFE valuation cap set?
  101. What does a SAFE discount give an early investor?
  102. What usually happens to a founder's percentage when new shares are issued?
  103. What does a startup cap table track?
  104. What makes a financing a priced equity round?