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Dear VCs of India - Please stop clapping for founders who report "Sales." It’s the most intellectually dishonest, dangerously vague term in the startup ecosystem today. Without strict definitions, "Sales" is just a vanity metric designed to invite premature applause while completely resisting basic scrutiny. It means absolutely nothing, as everyone considers a different definition. Let’s look at the uncompromising facts. .. You sell a three-year digital subscription and collect $3k upfront. That’s $3k upfront sales, but not $3k revenue. Why? The revenue is a deferred liability on your balance sheet masquerading as an achievement. - Biggest examples of startups which fooled people with this? Byju’s! - They claimed Rs 10k crore + topline, which they had top wind down to half a year down And Ola Electric also attempted something similar in Feb 2025. .. Take another case. Broadcasting a phenomenal $1M "Sales" month while conveniently ignoring a 30% Return to Origin (RTO) rate, a 15% refund rate on poor-quality products, and the massive 40% discount code you used to bribe the customer into buying. That $1M isn't your money. It never was. Best example? Nykaa! I have written a plenty lot on this. They have made a massive fool of people ever since the day they went public, circulating a GMV, which has mostly had a big divergence with the Net Sales Value it reports. .. And, we all know this. Founders do this because "Sales" looks like a hockey stick, while Revenue looks like reality. Revenue, by stark contrast, is what survives the gauntlet. Revenue is what remains only after you brutally and honestly deduct refunds, promotional discounts, GST/taxes, chargebacks, and cancellations. - Revenue is governed by the unglamorous, ironclad rules of recognition that auditors insist upon - It is recognized when the value is actually delivered to the customer, not the second the credit card is swiped .. And, when founders intentionally substitute "Sales" for "Revenue," they aren’t just fudging a slide - they are lying to their investors, their employees, and themselves. This deliberate metric manipulation masks rotting core economics. It is exactly why we see so many high-flying consumer startups dramatically implode the second a real auditor walks into the data room. And this also holds for big investors and VCs - Stop letting founders get away with this crap. Next time a founder boasts about their massive "Sales" growth on SOCIAL MEDIA/NEWS, stop clapping. Ask them three simple questions: 1 - What is your net realized revenue post-cancellations? 2 - Is this revenue recognized strictly under GAAP/IndAS standards? 3 - What are your exact deduction margins for refunds and RTOs? If they stutter, they don't have a real business. They have a cash-burning illusion. Demand reality. Stop funding vanity.