Do the math: Succeeding can be tough without it

Can you balance your checkbook? Can you read a balance sheet, a profit and loss statement? Numbers and entrepreneurship go together like

Entrepreneur and school board member Todd Gutschow

apple pie and ice cream. In school, they call it math.

There is little chance of success in starting a business if one is not comfortable with the numbers. Does revenue exceed expenses, and if not now, when, and then how much money do you need to bridge that gap and for how long? And then there are concepts like pre-money, post-money, liquidation preferences, dilution, return on investment. This stuff matters, and yet, in our interactions with many entrepreneurs, we’ve been surprised at how many struggle with these basic concepts.

Math is also important in “helping to prepare you for things that aren’t obvious right off the bat,” contends Todd Gutschow, co-founder of HNC Software (sold to Fair Isaac & Co.), a leader in the development of neural network technology for credit-card fraud detection. When you’re starting a company, you are in uncharted territory with a multiple series of decision trees, and each path chosen leads to another set of choices. “You have to use analytical methods and interpret those results to move your company forward successfully.”

Rest the rest at UT San Diego.

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