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BRAVE Southeast Asia Tech: Singapore, Indonesia, Vietnam, Philippines, Thailand & Malaysia Startups, Founders & Venture Capital VC (English)
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Founder Frauds, Startup Accounting Tricks (GMV, Revenue, Gross Margin, Contribution Margin) & Revenue Bundling & Valuation Multiples with Adriel Yong - E453
Manage episode 431534808 series 3243141
Adriel Yong, Head of Investments at Ascend Network, and Jeremy Au discussed three major topics:
1. Startup Accounting Tricks (GMV, Revenue, Gross Margin, Contribution Margin): Local VCs have often confused Gross Merchandise Value (GMV) with actual platform revenue, and gross margins with actual unit profitability. Startups have also split reporting contribution margin into CM1, CM2, CM3 and CM4. This has caused investor misunderstandings, accusations of misleading financial reporting and startup boards to focus on the wrong metrics. Prevalance is high due to inexperienced finance teams, emerging VCs and poor market norms/ incentives.
2. Revenue Bundling & Valuation Multiples: Jeremy and Adriel addressed how one-stop-shop/ superapp startups may bundle multiple revenue streams under a single total "revenue" term: one-off sales, onboarding fees, GMV-based revenue, direct material sales, SaaS subscription, and lending revenues. VCs may mistakenly apply the same "tech valuation multiple" to all of these different revenue streams, leading to inflated valuations and later misunderstandings of the actual growth rate. For example, many VCs failed to understand net interest margins for lending startups, thus failing to account for non-performing loans.
3. Founder Frauds: Jeremy and Adriel discussed real-life anonymized examples of theft, misrepresented financials, inflated invoices, related party transactions without proper disclosure and fake school credentials. They noted that these practices are common in markets with less rigorous due diligence processes or less professional founder / executive business norms. VCs face challenges in detecting fraud, such as spot-checking large-scale operations or non-existent offices, underscoring the need for thorough due diligence to verify data accuracy.
Jeremy and Adriel also talked about the impact of bribery and kickbacks on market operations, effective methods for verifying company operations, and the importance of appointing neutral CFOs to oversee transparent financial practices.
Watch, listen or read the full insight at https://www.bravesea.com/blog/startup-tricks
Nonton, dengar atau baca wawasan lengkapnya di https://www.bravesea.com/blog/startup-tricks-id
观看、收听或阅读全文,请访问 https://www.bravesea.com/blog/startup-tricks-cn
Xem, nghe hoặc đọc toàn bộ thông tin chi tiết tại https://www.bravesea.com/blog/startup-tricks-vn
Get transcripts, startup resources & community discussions at www.bravesea.com
WhatsApp: https://whatsapp.com/channel/0029VakR55X6BIElUEvkN02e
TikTok: https://www.tiktok.com/@jeremyau
Instagram: https://www.instagram.com/jeremyauz
Twitter: https://twitter.com/jeremyau
LinkedIn: https://www.linkedin.com/company/bravesea
TikTok: https://www.tiktok.com/@jeremyau
Instagram: https://www.instagram.com/jeremyauz
Twitter: https://twitter.com/jeremyau
LinkedIn: https://www.linkedin.com/company/bravesea
English: Spotify | YouTube | Apple Podcasts
Bahasa Indonesia: Spotify | YouTube | Apple Podcasts
Chinese: Spotify | YouTube | Apple Podcasts
521 에피소드
Manage episode 431534808 series 3243141
Adriel Yong, Head of Investments at Ascend Network, and Jeremy Au discussed three major topics:
1. Startup Accounting Tricks (GMV, Revenue, Gross Margin, Contribution Margin): Local VCs have often confused Gross Merchandise Value (GMV) with actual platform revenue, and gross margins with actual unit profitability. Startups have also split reporting contribution margin into CM1, CM2, CM3 and CM4. This has caused investor misunderstandings, accusations of misleading financial reporting and startup boards to focus on the wrong metrics. Prevalance is high due to inexperienced finance teams, emerging VCs and poor market norms/ incentives.
2. Revenue Bundling & Valuation Multiples: Jeremy and Adriel addressed how one-stop-shop/ superapp startups may bundle multiple revenue streams under a single total "revenue" term: one-off sales, onboarding fees, GMV-based revenue, direct material sales, SaaS subscription, and lending revenues. VCs may mistakenly apply the same "tech valuation multiple" to all of these different revenue streams, leading to inflated valuations and later misunderstandings of the actual growth rate. For example, many VCs failed to understand net interest margins for lending startups, thus failing to account for non-performing loans.
3. Founder Frauds: Jeremy and Adriel discussed real-life anonymized examples of theft, misrepresented financials, inflated invoices, related party transactions without proper disclosure and fake school credentials. They noted that these practices are common in markets with less rigorous due diligence processes or less professional founder / executive business norms. VCs face challenges in detecting fraud, such as spot-checking large-scale operations or non-existent offices, underscoring the need for thorough due diligence to verify data accuracy.
Jeremy and Adriel also talked about the impact of bribery and kickbacks on market operations, effective methods for verifying company operations, and the importance of appointing neutral CFOs to oversee transparent financial practices.
Watch, listen or read the full insight at https://www.bravesea.com/blog/startup-tricks
Nonton, dengar atau baca wawasan lengkapnya di https://www.bravesea.com/blog/startup-tricks-id
观看、收听或阅读全文,请访问 https://www.bravesea.com/blog/startup-tricks-cn
Xem, nghe hoặc đọc toàn bộ thông tin chi tiết tại https://www.bravesea.com/blog/startup-tricks-vn
Get transcripts, startup resources & community discussions at www.bravesea.com
WhatsApp: https://whatsapp.com/channel/0029VakR55X6BIElUEvkN02e
TikTok: https://www.tiktok.com/@jeremyau
Instagram: https://www.instagram.com/jeremyauz
Twitter: https://twitter.com/jeremyau
LinkedIn: https://www.linkedin.com/company/bravesea
TikTok: https://www.tiktok.com/@jeremyau
Instagram: https://www.instagram.com/jeremyauz
Twitter: https://twitter.com/jeremyau
LinkedIn: https://www.linkedin.com/company/bravesea
English: Spotify | YouTube | Apple Podcasts
Bahasa Indonesia: Spotify | YouTube | Apple Podcasts
Chinese: Spotify | YouTube | Apple Podcasts
521 에피소드
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1 Unicorn & Blockbuster Hunting, Emerging Fund Returns & Southeast Asia VC Landscape - E524 29:26
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1 Yudara Kularathne: D*ck Pics for Science, Child Emergency Doctor to AI Founder & Model Training vs. Regulatory Affairs - E523 36:20
1 VC Selection Edge vs. Startup Fraud, Local Expertise & Whaling Power Law - E521 28:04
1 Pinn Lawjindakul: Bain Consultant to Grab Head, Tiger Global to Lightspeed VC Partner, Southeast Asia vs. China & India - E520 38:52
1 Jianggan Li: China Exporters vs. Trump, Expansion to Saudi Arabia & Middle East, Electric Vehicle Wars - E519 28:00
1 Dave Overton: Philippines Humanitarian Commitment, Serendipity at Geeks On A Beach Community, Cebu Serial Founder - E517 32:44
1 Franco Verona: Foxmont Capital VC & BCG Report, Philippines Startup Opportunities, 10 Year Predictions - E516 31:03
1 Carlo Chen-Delantar: PH 2025 Challenges, Trump Geopolitical Tensions, Corporate vs. Independent VCs - E514 26:49
1 5 Predictions & 5 Wishes in 2025 for Southeast Asia Tech with Shiyan Koh - E513 28:30
1 Sean Ang: NUS Alumni Ventures, University Unicorn Founders, USA vs. Singapore Angels - E512 26:12
1 Cheryl Lau: Law & PHD Dropout, Side Hustle to Thought Leadership Podcaster, Asian Childhood Beliefs vs. Personal Growth - E511 35:48
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