3 views on why startup math may soon get a lot more creative
Given this year’s changing venture capital climate, it’s not a stretch to imagine that we’re going to see a lot more of the following: down rounds disguised as extension rounds, recapitalization events conflated with secondary activity and vaguely defined references to growth, burn and other key startup metrics. 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 too much money, we expect to see more creative math from founders. We are somewhat accustomed to founders bigging up their wins and spinning their losses, but such sins can threaten to become whole-cloth heresies during a downturn. Of course, it’s not all out of malice. For decades, those within startup land have not been able to agree on a definition for recapitalization or, heck, even bootstrapping, because the terms in and of themselves are so vague. Every few months, Tech Twitter wants to rethink how we name rounds,