Why communication failures destroy valuations faster than bad numbers
Hey there,
Most executives think presenting data is about having the right charts.
I think it's about not losing millions in valuation because you can't explain what the numbers actually mean.
Here's what I learned from my conversation with Chuck Garcia, a former Wall Street executive who now coaches Fortune 500 leaders:
The way you communicate your data story determines whether buyers see opportunity or risk. And they decide which one in 250 milliseconds.
That's faster than you can say "our LTV:CAC ratio is..."
Today, I want to show you why your perfectly accurate data might be killing your exit, and what you can do about it.
Let's dive in.
The 55-38-7 Problem That's Costing You Millions
Chuck shared something fascinating: When executives present to buyers or boards, only 7% of their impact comes from their actual words.
55% comes from what people see. 38% from how they say it.
Consider the last board meeting where you presented your quarterly numbers. The directors weren't just processing your revenue growth or customer acquisition costs. They were unconsciously deciding whether you knew what you were talking about based on your posture, your tone, and whether you seemed confident in your own data.
Here's the brutal reality I see with scaling companies: Perfect data presented poorly gets treated as imperfect data.
I've watched PE firms discount valuations not because the numbers were wrong, but because the management team couldn't confidently explain why those numbers mattered or what drove them.
The data was bulletproof. The story was Swiss cheese.
When Strategy Says One Thing, But Metrics Say Another
The most expensive communication failure I observe occurs when leadership teams discuss their strategy in the boardroom, only to optimize for completely different metrics behind closed doors.
You say you're focused on "sustainable growth and customer lifetime value."
However, every Monday morning meeting is focused on achieving this quarter's revenue targets, regardless of churn rates or acquisition costs.
Your data shows exactly what you're actually prioritizing. And sophisticated buyers can read between the lines faster than you think.
The team ends up confused about what really matters. Departments start pulling in different directions. And your data story becomes inconsistent across functions.
When due diligence starts, buyers don't just want to see your numbers. They want to understand how you got those numbers, why they're sustainable, and whether your team actually knows how to replicate them.
If your CFO, VP of Sales, and Head of Marketing all give different explanations for the same growth metrics, you've just created a risk premium that'll cost you 15-20% of your valuation.
The Context Gap That Kills Exits
Here's what most executives get wrong about data in high-stakes situations:
Data tells you what happened. Communication tells you why it matters.
Your monthly recurring revenue grew 23% last quarter. Buyers see that number and immediately start asking questions:
- Was this organic growth or acquisition-driven?
- Is this sustainable or a one-time boost?
- What happens if your top sales rep leaves?
- Can you replicate this in other markets?
The raw data can't answer these questions. Only clear, confident communication can.
And here's the part that'll keep you up at night: In approaching liquidity events, you don't get time to fix communication problems. Poor data presentation gets immediately categorized as risk, and risk gets priced into your valuation.
Buyers aren't going to pause their process to let you re-explain your customer acquisition strategy or clarify why your gross margins dipped in Q2.
They'll just assume the worst and adjust their offer accordingly.
3 Ways to Transform Your Data Communication
Stop Reading Your Slides
Chuck taught me that the moment executives start reading bullet points, they lose credibility. Your audience assumes you don't actually understand your own business.
Instead of slides full of numbers, prepare to tell the story behind each metric. Know why revenue grew, what drove the change in customer behavior, and what you're doing to sustain momentum.
Practice explaining your key business metrics without looking at any materials. If you can't do it confidently, neither can your team.
Eliminate the Strategy-Measurement Gap
Audit what you say you care about versus what you actually measure and reward.
If customer lifetime value is strategic priority #1, it should be the first metric discussed in every leadership meeting. Your sales comp plan should reflect it. Your marketing spend should optimize for it.
When your stated strategy aligns with your measured behaviors, your data story becomes coherent and consistent. When it doesn't, buyers immediately sense the disconnect.
Build Context Into Your Reporting
Raw numbers without context can create confusion. Context without supporting data can also create doubt.
Every key metric should come with three pieces of context:
- What drove this result?
- Why does this matter for future performance?
- What are we doing to improve/maintain it?
Train your entire leadership team to speak this language. When due diligence starts, every executive should tell the same coherent story about your business performance.
That's it.
Here's what you learned today:
- First impressions on your data happen in 250 milliseconds, not after detailed analysis
- Strategy-measurement misalignment destroys credibility faster than bad numbers
- Context transforms data from information into actionable intelligence
The most successful exits I've seen weren't companies with perfect metrics. They were companies that could clearly communicate why their metrics mattered and how they planned to improve them.
Your data might be investor-grade. But if your communication isn't, buyers will never know.
PS...If you're enjoying Transformed With Data, please consider referring this edition to a friend. They'll thank you for helping them avoid expensive data mistakes.
Whenever you are ready, we can help you with a free data infrastructure assessment to identify your highest-impact opportunities. Get in touch!
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