Don't lie about your 'Hockey Sticks'

Hockey's in the air today. But, here we're not talking about the FBI's investigation of Predators investor Boots Del Biaggio. This note's on "hockey sticks," those often-suspect projections of startup revenue that depict poor-performance near-term, but incredible resurgence -- three or four quarters out. During a chat today with LBMC valuation expert Chris Lovin, I chuckled when he mentioned that, while valuation experts aren't typically expected to render opinions on a company's performance projections, if they see "the old hockey stick," it's often cause for pause. Also, until today, I hadn't realized that a company's "goodwill" might be split between the company, itself, and, say, an individual founder who's been deeply involved in customer sales and service. I don't think many who lead startup ventures give much thought to these things, particularly if they spend a long time in "friends-and-family" financing-mode, where napkin projections would seldom withstand dispassionate review. Read more and send us your thoughts. Here's the link. This post updated 1326.