Jason Hishmeh's Blog: The 6 Startup Stages - Posts Tagged "tech-startups"

Recently I was in discussions with a startup founder who informed me their company's valuation was over $20 million. At this point he only had an idea - no team, no product, no revenue, no traction.

For many founders, they believe having a high valuation is a sign of success. In fact, this may doom their chances of building a successful company.

What they often don't realize is a high valuation means higher expectations of what the founder must accomplish in order to provide an ROI to the investor.

If the founder has no track record of success, an investor is unlikely to believe they can accomplish what is required to deliver that ROI.

Recently a startup asked me to introduce them to investors.

I asked them a few questions and realized they had no up to date financials, no financial reporting capabilities, and no ability to provide investors with updates as they scaled.

I told them I was not comfortable introducing them to investors due to this.

I instead gave them some advice on FP&A (Financial Planning & Analysis) tools to put in place to fix these gaps.


By
Jason Hishmeh