“Cash Flow Positive” refers to when the amount of cash flowing into a company (e.g., Revenues) is more than the amount of cash flowing out (e.g., Expenses) of the company over a specified operating period.

The ability of a Startup to operate in a Cash Flow Positive manner often is a significant milestone in a Startup’s evolution as it then may have the ability to sustain its operations without additional (or at least with less) outside funding and potential Dilution.

Being Cash Flow Positive does not necessarily mean, however, that a company is profitable. When determining its profitability, a company compares its Revenues and Expenses over a specified operating period, and there may be accounting and non-cash adjustments that affect the company’s profit or loss status.