“Confidence sells the dream but …”: The CEO occupies the debate on Vision in exchange for an evaluation of the founders of startups

Harsh Bucharan, CEO of OKCredit, sparked a vital discussion about LinkedIn after sharing his point of view on how startups in the early stage dealt with donations and assessments.

Buchanerna recounted a recent interaction with the founders of a startup, although there was no product or revenue, who were seeking to raise $ 2 million with a value of $ 40 million. While admired their confidence and energy, he asked about the practical application behind their numbers.

“When I asked why they believed that investors would agree to this, the CEO replied,” Because we will reach one billion dollars one day. “This is where I collapsed for me.

A practical framework for the founders

To direct entrepreneurs in the early stage, Bucharan set a simple framework:

• Raise for 18 months: 12 months to strike the prominent landmarks in the next round, in addition to 3-6 months to close it
• Financial needs account: including salaries, product, marketing and operational expenses
• Expect 10-20 % of shares: a common range for investors in the early stage

The logic explained with an example: “If you need 300 thousand dollars for 18 months and offer 15 % of the shares, and your evaluation = 300 thousand dollars ÷ 15 % = 2 million dollars. Simple. Practical. A friend investor.”

Boucharna summarized the lesson with a reminder: “It sells the dream of a dream. But the numbers close the deal.”

Vision against the evaluation

I drew the latest strong reactions through the startup community. Some agreed to the practical approach of our Bucharan, while others defended the power of the investment that is driven by the vision.

One commentator responded, “Sometimes, investors are ready to support a vision that may not have tangible standards yet, especially if the founders have a busy record or a unique vision in their market. Confidence and ambition must be balanced with financial planning, but they are still vital.”

Another position supported by our Bucharan, writing, “The spot on. Confidence is necessary, but the evaluation in the early stage is everything about practical application-financing needs, landmarks, and realistic stock expectations. Numbers + vision = investor confidence every time!”

“Everyone is lying until you ask them about traction and their plan to achieve their goals. Saying that you will travel to Mars tomorrow is one thing; building a missile is another.”