3 Looks at Why Startup Math May Be Much More Creative Soon

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Considering this year changing the venture capital climate, it’s not hard to imagine we’ll see a lot more of the following: down rounds disguised as expansion rounds, recapitalization events merged with secondary activity, and vaguely defined references to growth, incineration and other key startups. metrics.

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As the economic downturn threatens the ability of companies to meet their growth goals while highlighting the need for them to get there faster without losing too much money, we expect to see more creative thinking on the part of the founders.

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We’re somewhat accustomed to founders multiplying their wins and spinning their losses, but such sins can threaten to turn into outright heresy during an economic downturn. Of course, it’s not all evil. For decades, those in startup country couldn’t agree on a definition of recapitalization, or heck, even bootstrapping, because the terms themselves are very vague.

For example, every few months Tech Twitter wants to rethink how we call rounds. But the terms are relative, and the job of a journalist is to get as close to the truth as possible (and fight back when nonsense is used instead of the truth).

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In this column Natasha Mascarenhas, Haye Jan Kamps as well as Alex Wilhelm talk about what the annual reporting might look like and what they expect to see, or perhaps more accurately, what they not want to see. The column is a kind of addition to recent stock podcast discussion of the same topic. Check out the module, then dive into the extended takes below!

Natasha Mascarenhas: Unfortunately, growth is subjective.

It’s probably not surprising that as a journalist, I enjoy the companies I interact with every day. I’m talking about particulars, not generalizations, data, not drama, and evidence that you are growing, not promises that you are. As a result, whenever a startup is allergic to being placed in a very clear box – as simple as lifting a Serie A – is both a pet peeve and a matter of inaccuracy.

Why? Unfortunately, growth is subjective, which means that often private companies (who are not required to publish their financial data) can create a semblance of it without much repercussions. For example, a startup’s revenue could grow 100% year-over-year, but it could be either $1 to $2 thanks to the first customer, or $5 to $10 million; who will say? Sometimes this example alone can get the founder to tell me their true height range, but often it means I have to put an asterisk next to any vague growth figure I include in stories.




Credit: techcrunch.com /

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