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Hi and welcome to the A16Z podcast.

I'm Doss and this episode is all about what the numbers, both financials and

KPI's, do and don't tell you about your business. Our guests for this

episode are A16 Z general partner and managing partner Jeff Jordan, who previously

ran several businesses and took a company public right after the 2008 financial crisis.

David George, who runs our late stage venture operation and Caroline Moon

who leads our financial operations practice and helps companies with their own

best practices. She's also a former CFO. In our conversation, we cover the most common mistakes people make when it comes to understanding numbers.

When investors think when they look at a company's profit and loss statement and why,

how investors use metrics to determine if a business is healthy, and how some founders may use them to navigate times of crisis.

We begin though with the basics of the three core financial statements, the

income or P&L statement, the balance sheet, and the cash flow statement. The first

voice you'll hear after Caroline's and mine is Jeff's followed by David's.

Especially in the early days of a startup, they'll just try to do cash accounting and that's just literally how

much cash did I have in the beginning of the period, how much should I have the cash at the end of the

month and that's not the same thing as what beginning of the period, how much did I have the cash at the end of the month?

And that's not the same thing as what a P&L relation show, because your P&L paints the picture

of how your business did in a particular period of time and measurement, whether that's quarterly or yearly,

or the cashier statement then reconciles

that with what did you actually collect?

...