If you are going to build a startup, build a board, get your finances in control and very transparent to investors.
Fraud will never be gone but you can ensure your firm will never be accused of it.
One of my takeaways from the chaos surrounding SVB’s collapse is that Silicon Valley is starved of CFOs. Part of this is due to the anti-MBA high horse that was in vogue in tech post financial crisis. Part, frankly, is VCs wanting to be the only financial brains in the house. (Guess who loves promoting the MBA myths? Despite being staffed by MBAs?)
Their problem is they want the financials to track to their financial models despite their entire investment thesis being an opportunistic wonderland of assumptions. Otherwise, it wouldn’t have met someone’s imaginary return threshold.
Not a real choice. Ramen-stage start-ups don’t need CFOs. And investment banks don’t hire CFO types.
The real choice is between a growth-stage company and private-equity sponsored company. In summary, do you want to be compensated for your risk in cash or ownership?
CEOs seem to be expected to be optimistic and over-confident - and perhaps rewarded for that too.
Silicon Valley VC convinced technical folk that we are better than those MBAs and don’t need no suits or whatever. That leads to stupid financial decision making on an operating level, e.g. companies keeping hundreds of millions in a checking account, which is great if that account is your liability. It also keeps the VCs the smartest financial minds in the room. (I don’t have an MBA.)