Your startup ain’t Google — FYI (continued)
Here are 4 more signs that your startup equity could be worthless:
4) The company has a billion-dollar valuation pre-product.
5) The revenue/raised ratio is totally f^cked (aka low).
This is the company’s revenue divided by total raised.
This is especially problematic as companies get more mature.
The best companies are machines at turning $ raised into revenue at some point.
6) Media articles where the co's revenue projections keep changing.
In 2020, it said it'd do $25M in revenue to a journalist.
In 2021, it tells another journo it did $15M in 2020 and is expecting $50M in 2021.
Beware of teams who are good at storytelling but who stink at actual delivery.
7) Founders that rush into raising $ to build a co in a hot space to become player no. 10.
These folks aren't actually motivated by the problem they're solving. They just see an opportunity for a quick flip.
They'll get bored when the momentum dies and then they'll pivot to Web3.