3 thoughts on why startup math could soon get a lot more creative – Meczyki.Net

looking at this year With the changing venture capital environment, it’s not a stretch to imagine that we’re going to see a lot of the following: down rounds disguised as expansion rounds, recapitalization events with secondary activity and growth, by Byrne and other major startups. vaguely defined reference metrics

We expect to see more creative math from founders as the recession threatens companies’ ability to meet growth goals, as well as emphasizing the need to achieve them fast while not losing too much money.

We are somewhat accustomed to founders increasing their wins and spinning off their losses, but such sins can threaten to become the hypocrisy of the whole fabric during recessions. Of course, it’s not all out of malice. For decades, people within startup land haven’t been able to agree on a definition of recapitalization or, heck, even bootstrapping, because the terms in and of themselves are so vague.

For example, every few months, Tech Twitter wants to rethink how we name rounds. But the terms are relative, and it’s a journalist’s job to get as close to the truth as possible (and hold back when fluff is used as a replacement for truth).

In this column, Natasha Mascarenhas, haje jaan kampso And alex wilhelm talk about what the year’s data reporting might look like and what they’re expecting to see or, perhaps more accurately, what they might see Don’t want to see. The column is a companion piece to the recent Equity podcast debating the same topic. Check out the pod, and then dive into the extended tech below!

It is perhaps not surprising that I, a journalist, enjoy clarity from the companies with whom I speak on a day-to-day basis. I’m referring to generalizations, data at play, and evidence that you are growing versus the promises that you are. As a result, whenever a startup shows an allergy to put in a very clear box – as the Series A picked up – it is both a pet peeve and a question of inaccuracy.

Why? Growth is subjective, sadly, which means that at times private companies (which are not required to share their financials publicly) can glimpse it without many repercussions. For example, a startup’s revenue may grow 100% year over year, but it can either range from $1 to $2, thanks to its first customer, or from $5 million to $10 million; who’s to say? Sometimes that example by itself can get a founder to tell me the true extent of their growth, but it often means I need to put an asterisk next to any vague growth metrics I’ve included in the stories. .