There’s a simple truth in venture capital that doesn’t get talked about enough:
Nine times out of ten, the math eventually breaks.
We all love the pitch decks, the visionary founders, the hockey-stick growth curve projections. But somewhere in those models, the numbers start to betray the story. It might be customer acquisition costs that never come down. It might be burn rates that climb faster than revenue. It might be a cap table so bloated with preference shares that even a strong exit leaves common shareholders looking for more.
The pattern is often the same: the story looks brilliant, but the math doesn’t add up.
That’s why the best investors I know don’t start by asking, “What if this works?” They start by asking, “Where does the math break?”
Stress-Testing the Story
Investing in a startup isn’t about buying into a dream. It’s about stress-testing a system.
What happens if the projections are 50% too optimistic?
What happens if margins never expand as promised?
What happens if a down round becomes unavoidable in 18 months?
Most founders avoid those conversations. The best ones invite them.
The math that looks pristine in a pitch deck usually fails when tested against real-world scenarios. And that’s where venture investors earn their edge: spotting the cracks before the crash.
Why This Matters Now
Today’s venture market is still digesting the cheap money hangover.
Startups that raised at inflated valuations are now running into the wall of higher interest rates, inflation, rapidly advancing AI, tighter liquidity, and healthy skepticism.
The math that worked in 2021 doesn’t work in 2025.
And just as governments try to paper over deficits with more borrowing, startups often try to cover shortfalls with bigger rounds. But dilution and down rounds eventually catch up… and when they do, the cap table math collapses.
The Founder Worth Backing
The founder I want to back isn’t the one with the slickest deck. It’s the one who sits across from me and says:
“Here’s where our model breaks. Here’s where we’ll need more cash than we thought. Here’s where we could lose leverage.”
That kind of honesty signals they’ve run the numbers until they bleed. And if they’ve done that, I can believe them when they tell me how they’ll scale.
Because in venture capital, the math will almost always break somewhere. The question is whether the founder knows where, and has a plan to survive it.
Final Thought
Stories move markets. But in the end, math wins.
The edge in venture capital isn’t believing the story harder than anyone else. It’s finding the point where the math breaks, and backing the founders who are prepared for that almost certain inevitability.
