Down rounds, recapitalization events, secondary activity and vaguely defined references to growth, burn and other key are some of the things we are likely to see more of this year.
As the downturn threatens the ability of companies to meet growth targets, simultaneously emphasizing the need for them to get there faster while not losing a lot of money, we expect to see more innovative math from founders.
During a downturn, sins like bigging up their wins and spinning their losses can become whole-cloth heresies. It isn't all out of malice. The terms in and of themselves are so vague that those within startup land have not been able to agree on a definition for recapitalization or bootstrapping.
Tech Twitter wants to change the way we name rounds. The job of a journalist is to get as close to the truth as possible and push back when fluff is used as a substitute for truth.
They talk about what the year's data reporting could look like and what they don't want to see. The column is a companion piece to a discussion on the same topic. The extended takes are below if you check the Pod.
I enjoy clarity from the companies that I speak with on a day to day basis. I'm talking about details over generalizations, data over drama and proof that you're growing. It is both a pet peeve and a question of inaccuracy when a startup shows an allergy to being put into a box.
What's the reason? Private companies can float a semblance of growth without repercussions because growth is subjective. A startup's revenue may have grown 100% year over year, but that can either be from $1 to $2, thanks to its first customer, or $5 million to $10 million. Sometimes that example in and of itself can get a founder to tell me the true range of their growth, but it often means I need to put an asterisk next to any vague growth metric I include.
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