When people hear the phrase “massaging the numbers,” they immediately think of Enron. They think of cooking the books, hiding losses, or putting lipstick on a pig.
I’ve never been paid to put lipstick on a pig (plenty of people have asked). But I have spent my entire career putting lipstick on supermodels.
As a founder, you need to first make sure that you’re working with a supermodel. And the only way to do that is to make sure you are fundamentally strong. That way, you’ll look good from any angle. Once you’ve established that, you get to pick your best angles and feel comfortable that follow up questions and deep dives will reinforce the messaging that you’ve already created. If you simply hand over your raw operational data to an investor or a buyer, they almost certainly won’t see magic. They see a messy plate of spaghetti. This is not because of lack of motivation or skill, but because what you’re building is probably (hopefully) unique, and therefore requires annotations, guidance and perspective to paint a proper picture.
Great investment banking - the kind I was lucky enough to do at Morgan Stanley during the 2011-2013 tech IPO and M&A boom alongside legends like Michael Grimes and Marcie Vu - isn’t about being a spreadsheet monkey. It’s about being a translator. It’s about taking the complicated reality of a brand new business model and translating it into the financial frameworks that the public markets and acquirers can actually understand.
Massaging the numbers isn’t deception. It is narrative control.
It’s not deception, it’s guidance.
It’s not optional, it’s required.
Over the last 15 years, the leverage required to execute this translation has fundamentally shifted. If you understand this progression, you can do what used to take a team of Wall Street bankers two weeks to do by yourself in a single afternoon.
The key job of a CEO is to capitalize their business. There are different forms of capital - not just equity and debt, but also human capital, technology capital and hard assets. For a Fortune 100 CEO, this generally means managing Wall Street, making key hiring decisions and working with the board of directors to drive strategy. For a Seed Stage startup, it also includes those functions, but also so much more. It’s critical though not to forget that failing to capitalize your business properly is failing as a CEO.
To understand how much power you have as a founder today, you have to look at how the work used to get done.
1. Horizontal Teams (Peak Inefficiency)
When I was in my IB training program, they put four of us on a standard valuation deck. It took us collectively six hours to complete an assignment that a single, experienced person could have done in four. Progress dies in the handoffs. Grouping by function without extreme ownership creates massive communication overhead.
2. Vertical Teams (The Coordination Tax)
This is the standard banking model: Analyst to Associate to VP to MD. Work goes up and down the stack, iterating slowly. But the real breakthroughs happen when you collapse the stack. When we were figuring out how to value Facebook for its IPO, it required deeply creative modeling. Michael Grimes didn’t send emails down the chain; he came and stood over my shoulder at my keyboard. We bypassed the coordination tax and did what would have been days of iterative, team-level work in about 30 minutes.
3. The Solo Performer (Deep Context)
Fast forward to 2015 when I was at NEA. We had a portfolio company in the storage space looking at an M&A offer. A classic banking team would have spent hundreds of hours on this. Because I held 100% of the context in my own brain, I spent about 29 hours solo digging through data, and in the final hour, had a massive revelation. I realized the company could be valued the same way Wall Street was valuing a newly broken-out AWS. We positioned the startup as the exact synergistic engine the acquirer needed, and the company sold for double the original offer. One brain with deep context beats a bloated team.
4. The 10x Paradigm (Individual + AI)
A few weeks ago, I was on a board call with a startup facing a very obvious PE-backed acquirer. Instead of spending 15 hours reading the acquirer’s last 10K, I dumped it into AI. Within 60 seconds, we identified their strategic vulnerability: their market penetration was capped, and their only path to growth was ACV expansion. In the next 30 minutes, we used AI to build a thesis and a deck outline proving our startup was the exact revenue-generating engine they needed to double their ACV across their existing base. Understanding the work to be done has become the most important factor, rather than the ability to do it. Attracting the attention of a strong investment banking team is impossible for most companies - new AI tools mean that now you don’t have to, and you can do it yourself.
Founders usually understand their product and market. They may even intuitively understand their business model, but they often fail at translating that complex machine to investors. They react to investor diligence questions as if the investor knows something they don’t.
For example, when a VC asks for your “customer concentration,” they are communicating through what Ben Gilbert (Co-host of Acquired) calls a “lossy compression” algorithm. They don’t actually care about your raw spreadsheet. They have a specific fear: “If your biggest partner leaves, does this business die?”
If you blindly send them your raw, unformatted, day-to-day operational data, they will almost certainly misinterpret it. You need to understand the depth and context (or lack thereof) of a question before you answer it. Throwing data over the fence is almost never going to work out.
You must answer the underlying fear, not just the literal question.
You are the absolute authority on your business. You get to design the lossy compression algorithm that investors use to view your company. Accept that investors need you to oversimplify it - a lot - in order to understand it well enough to get excited.
Don’t show them the day-to-day spaghetti charts of user usage if that isn’t where your core enterprise value lies. If your real revenue drivers are your channel partners, map them.
Use time-adjusted, cumulative cohorts. Show Partner 1, 2, and 3 normalized to “Month 1, Month 2, Month 3,” and stack their cumulative volume. Why? Because you need to make it easy: remove the distracting noise of daily operations to reveal the underlying physics and predictable trajectory of your business. You are shifting their focus from the messiness of the present to the massive scale of the future.
Does all of this take time and effort, and therefore feel like a distraction from your business? YES.
But you need to remember your core job as a CEO…
As a CEO, your primary job is to capitalize the business - with equity, debt, human capital, and technology. To do that, you must be able to zoom out from debugging code and answering customer service calls to a 100,000-foot strategic view. That view is the only thing that investors really care about - everything else they want to know about your business is only to validate that vision.
Nobody knows your business better than you do. Stop waiting for investors to ask the right questions. Figure out your narrative, format your numbers to prove it, and feed it to them.
Would you like me to pick apart your business? If you want to get energized and run one of these M&A or fundraising narrative exercises on your own startup, hit reply. Let’s find your smooth curves.
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