Funding Announcements Are Just Vanity Noise

Reminder

Funding announcements from Startups are designed to grab the attention of future funding sources, potential business Partners and prospective Employees.

– Statistics that are shared tend to be “vanity metrics” rather than the true core drivers of the business

– Multiple rounds of financing as well as debt can be rolled together into a single release that’s both dated and inflated as a result

– Rarely are the details of a round shared in a fully transparent manner with “structure” almost never disclosed

– If it’s announced that leadership is coming or going you won’t be told the whole “why” nor about the contract the old or the new Leadership has with Investors

And as always, most funding rounds signify that a company has procured additional fuel that can be used to run experiments and to scale. But the true “value” of a company isn’t known until illiquid shares flip to liquid shares via a sale or an IPO. Everything else is noise.