The vibration of the impact is still echoing somewhere behind my left ear. I was walking, coffee in hand, staring intensely at a slide deck on my phone that claimed a pre-seed startup was worth $13 million. Then, thud. A glass door, so impeccably clean it might as well have been a localized tear in the fabric of space-time, stopped my forward momentum with the clinical indifference of a brick wall. My nose hurts, my dignity is currently in a 43-degree decline, and for some reason, the only thing I can think about is how much the glass door itself is worth. Is it worth the cost of the silica? The labor of the person who polished it into invisibility? Or is it worth the $333 I’m likely going to pay for the medical check-up to ensure my brain isn’t leaking?

We treat startup valuation like it’s a discovery process, like we’re archaeologists brushing dust off a fossilized truth. We think if we just find the right Multiples or the right Discounted Cash Flow formula, the ‘Real Number’ will emerge from the dirt, gleaming and indisputable. It’s a comforting lie.

The Submarine Apple: Value as Narrative Construction

In reality, valuation is much more like the meals Hiroshi B.K. used to make when we were stationed on that research submarine 13 years ago. Hiroshi was the submarine cook, a man who could turn a can of spam and a handful of dehydrated seaweed into something that felt like a Michelin-star experience, purely through the way he described the ‘lineage’ of the ingredients while we were 2003 meters below the surface. On the sub, a single fresh apple was worth more than a gold bar. Not because of its nutritional value, but because of the story it told us about the world above-the sun, the wind, the possibility of not being trapped in a pressurized metal tube. The value was socially constructed by 33 hungry people who hadn’t seen a tree in 53 days. Hiroshi didn’t calculate the cost of the apple; he built a narrative around the crunch.

Startups are the fresh apples of the financial world. You aren’t selling the EBITDA of 2023; you’re selling the crunch of 2033. If you approach your valuation as a math problem, you’ve already lost the game to the person who approaches it as a theater production.

“I’ve seen founders walk into meetings with 73 pages of financial projections, only to be torn apart because their ‘story’ felt small. And I’ve seen founders with 3 slides and a vaguely functional prototype walk away with a $43 million valuation because they managed to convince the room that they were the only ones who understood how the next decade would unfold.”

The GP as the Final Consumer

Hiroshi B.K. once spent 3 hours explaining to a disgruntled sonar technician why the slightly burnt toast he was served was actually a ‘charred artisanal grain experience’ designed to evoke the feeling of a campfire. It sounds ridiculous, but the technician ate the toast and felt better. The narrative changed the internal state of the consumer.

In the venture world, the ‘consumer’ is the GP at a fund who needs to justify a high-risk bet to their LPs. They need a story they can repeat. They need to believe that your $83 million pre-money valuation isn’t a hallucination, but a bargain based on the 103x return they’re going to see in a decade.

The Obvious Future

I think about the glass door again. The reason I hit it wasn’t that I was stupid-well, not entirely. It was because the glass was doing its job too well. It was providing a barrier while pretending it wasn’t there. A good startup narrative does the same thing. It provides a solid foundation for a valuation while feeling completely transparent and natural. It shouldn’t feel like a sales pitch; it should feel like an observation of the obvious future.

Numbers that end in 3 have a weird aesthetic to them, don’t they? They feel intentional. A $10 million valuation feels like a placeholder. A $10,000,003 valuation feels like someone actually did the work, even if they just added the 3 for luck.

Most founders are terrified of the ‘Art’ side of finance. They want it to be a science because science is repeatable. Science has rules. But the market isn’t a laboratory; it’s a bazaar. It’s noisy, it’s emotional, and it’s driven by the fear of missing out. If you try to bring a calculator to a poetry slam, you’re going to have a bad time. You have to be able to speak the language of ‘What If.’

The Courage of the Narrative

My forehead has a small, red mark now. It looks a bit like a ‘3’ if you squint. I’ll probably tell people I got it doing something heroic, like saving a cat from a 13-story building, rather than walking into a stationary object because I was looking at a phone. That’s the narrative. The narrative is better than the truth. The truth is boring and involves a lack of spatial awareness. The narrative involves courage and 13 stories of danger. Which version of me do you want to invest in?

We spend so much time trying to avoid the ‘fictional’ nature of valuation that we forget that all value is fiction. Currency is a story about government stability. Stocks are a story about future earnings. Your startup is a story about a version of the world that doesn’t exist yet. Stop trying to prove the story is true with a spreadsheet. Start making the story so compelling that the spreadsheet becomes the only logical conclusion to the tale.

How much of your current valuation is based on a spreadsheet that you know, deep down, is a work of speculative fiction? And more importantly, if you removed the numbers, would anyone still believe in the plot?