I’ve worked with enough founders as a Fractional CFO to know when the fundraising story is driving the business - instead of the other way around. You can feel it in the questions they ask: “Can we push the valuation up a bit more?” “Will this multiple look impressive enough for Series A?” “Is this deck ‘venture-ready’?” Don’t get me wrong - the ambition is valid. The pressure is real. But here’s what I’ve seen firsthand, over and over again: When valuation becomes the goal, value creation takes a backseat. And eventually, that gap catches up with you. I’ve Sat in the Room After the Hype I’ve worked with founders post-fundraise who were sitting on money they didn’t know how to deploy, struggling to justify the valuation they had just locked in. The cash burn had doubled. The team size had ballooned. Revenue was climbing, but margins were shrinking. On paper, they looked like they were doing everything right. In reality, they were scrambling — because they’d scaled for optics, not for strength. One founder confided in me: “We raised $2 million, and now I feel like we built a cost structure that we’re not sure we needed.” That’s the trap. Valuation drives expectations. And if you haven’t done the work underneath — clean accounting, disciplined budgeting, reliable metrics — you’ll spend the next 18 months trying to reverse-engineer fundamentals to match a headline. Valuation Without Value = Fragility Here’s what I’ve learned through real-world cleanups: High valuations lock you into a narrative - one you may not be able to sustain.
They create internal pressure to spend fast, hire fast, and hit aggressive metrics - often before the systems are in place.
They reduce your options. If you miss targets, you face down rounds, tough renegotiations, or bridges on unfavorable terms. High valuations lock you into a narrative - one you may not be able to sustain. They create internal pressure to spend fast, hire fast, and hit aggressive metrics - often before the systems are in place. They reduce your options. If you miss targets, you face down rounds, tough renegotiations, or bridges on unfavorable terms. Most importantly, they distract founders from what actually builds value: Retention
Pricing power
Operating leverage
Cash conversion
Margin expansion Retention Pricing power Operating leverage Cash conversion Margin expansion I’ve seen founders raise at a $10 million valuation and then get trapped: Hiring ahead of product-market clarity. Discounting to hit top-line goals. Spending on scale before profitability. By the time the next round came, the valuation looked out of sync with the metrics - and they were forced into tough conversations. Capital Is a Tool. Not a Trophy The best founders I’ve worked with understand this. They raise when they’re ready - not when the market’s hot. They raise only what they need - not what will grab headlines. They walk into investor meetings with systems already working - not just stories polished in the deck. Here’s the shift I’ve seen in those who build with discipline: 1. They start with internal readiness 1. They start with internal readiness Before talking to investors, they get their numbers right: A forecast tied to actual milestones


Clean books that reconcile with filings


Cohort and margin data that holds up in diligence A forecast tied to actual milestones A forecast tied to actual milestones Clean books that reconcile with filings Clean books that reconcile with filings Cohort and margin data that holds up in diligence Cohort and margin data that holds up in diligence 2. They use capital to accelerate, not to survive 2. They use capital to accelerate, not to survive They’ve built lean. They have control over receivables, collections, burn. When they raise, they’re not plugging a hole - they’re fueling an engine. 3. They measure fundraising in options, not ego 3. They measure fundraising in options, not ego The goal isn’t to “get the highest valuation.” It’s to raise at terms that preserve flexibility, ensure follow-on alignment, and leave headroom for growth. From My Side of the Table: What I Ask Founders Before supporting any raise, I ask three simple questions: How much do you actually need? Not what feels right. What’s the capital you need to hit the next strategic milestone - and nothing more?
Can you justify it with your current model? Are unit economics clear? Is there visibility on margins, burn, and outcomes? If not, let’s fix that before pitching.
What’s the cost of raising too much, too soon? Are you prepared for the pressure that valuation brings? Because every $500,000 you raise comes with expectations — and oversight. How much do you actually need? Not what feels right. What’s the capital you need to hit the next strategic milestone - and nothing more? Can you justify it with your current model? Are unit economics clear? Is there visibility on margins, burn, and outcomes? If not, let’s fix that before pitching. What’s the cost of raising too much, too soon? Are you prepared for the pressure that valuation brings? Because every $500,000 you raise comes with expectations — and oversight. One founder I worked with had the discipline to delay their round by four months. In that time, they improved collections, reworked pricing, and cleaned up their cap table. They ended up raising a smaller round at better terms — and most importantly, they weren’t chasing headlines. They were building leverage. The Real Value Is in Building Value Valuation should be the outcome of: Efficient growth
Retention that compounds
Cash discipline
Pricing confidence
Metrics that hold up under scrutiny Efficient growth Retention that compounds Cash discipline Pricing confidence Metrics that hold up under scrutiny And that work? It happens long before the deck gets designed. I’m not saying don’t raise. I’m saying: raise when the business is strong enough to carry the weight of the capital. Not the other way around. Because once the cheque clears, the clock starts ticking. In every messy post-raise I’ve been called into, the root problem was the same: They raised for perception, not for purpose. If you’re building something real, my advice is this: Don’t chase valuation. Build value. Valuation will follow - and when it does, it will last. Build value. Valuation will follow - and when it does, it will last Have questions or want to jam on startup finance? Have questions or want to jam on startup finance? I’d love to hear from you — just drop by kishoredasaka.com and say hi. kishoredasaka.com

7 Cap Table Mistakes That Kill Startups

Chase Value, Not Valuations

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