I feel like the upper management of my company is taking a lot of risk. We are a b2b startup (no consumer facing) at a late stage (series D) and despite growth growth being definitely slower than it used to be, I just heard a rumor that they’re trying to raise more money at a valuation of 50X our current revenues, which is simply insane, our competitors who are public are in the 10X multiple. They are basically setting themselves up for failure.
Letting aside for a second the VCs who give money at such crazy terms, why are the execs risking so much rather than trying to sell ship at current valuation, which I think they could? I think by being so “over leveraged” the risk is massive.
A couple execs (vp of sales and vp of product) already left. I asked for coffee with them (I was an early employee so I have a good relationship) and they informally confirmed that the company is becoming too risky for them (due to revenues not materializing and CEO chasing higher valuations) and they don’t want to be caught in the middle if things go down for reputation issues.
No, they are setting up themselves for retirement. They are setting you up for failure.