Founder Frauds, Startup Accounting Tricks (GMV, Revenue, Gross Margin, Contribution Margin) & Revenue Bundling & Valuation Multiples with Adriel Yong - E453

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.