By Leke Onanuga
In a blunt warning to the venture capital community, Osita Victor Egwuatu, a Product Management, Strategy & Growth Consultant and the originator of the Traction Evaluation and Optimization Tool (TEVOT), says a growing reliance on unvalidated growth claims is quietly inflating portfolio risk and masking systemic weaknesses across startup ecosystems. “When momentum is measured with vanity rather than validation, every decision you make from follow-on funding to board seats is built on sand,” Egwuatu said, calling on investors to rethink how they appraise early-stage success.
Egwuatu’s concern stems from what he calls the “scatter” of modern growth signals with disparate metrics, anecdotal wins and campaign spikes that are often presented as evidence of sustainable traction but rarely survive rigorous cross-validation. TEVOT, the diagnostic and decision-support system he conceived, was built precisely to translate those scattered signals into validated, comparable measures of real momentum, tracking user adoption, retention, revenue, operations and partner uptake while filtering out vanity metrics that can mislead founders and funders alike. “We built TEVOT because investors were asking for a single language,” he explained. “Not a prettier pitch deck, but a disciplined way to separate short bursts from structural progress.”
Industry watchers say that many investment decisions still lean heavily on headline figures from month-to-month user spikes, downloads, impressions and revenue that sometimes result from one-off campaigns or promotional pricing. The danger, according to Egwuatu, is not merely overvaluation. “It’s the false confidence that leads to disproportionate capital allocation,” he warned. “A portfolio weighted toward unverified stories is a portfolio that will surprise you, and rarely in a good way.” He points to recurring patterns TEVOT uncovers with cohorts that never activate, partners who nominally sign up but never integrate, and revenue streams that evaporate once incentives disappear. These are common failure modes he believes are underreported.
The problem, Egwuatu says, is compounded when financial operations are siloed or reconciliations lag. As co-originator of UfinMD, a web SaaS platform designed to unify dispersed financial data into a single, auditable dashboard with automated transaction extraction, reconciliation and AI-driven anomaly detection, he argues that operational opacity amplifies the risk posed by unvalidated traction. “If growth numbers are neat but the books don’t reconcile, you’ve got a storytelling problem that will become a solvency problem,” he said. “Investors must insist on financial hygiene as a predicate for believing growth claims.”
Egwuatu’s prescriptions are both technical and cultural. On the technical side, he urges investors to adopt standardized, evidence-backed diagnostics that benchmark performance and identify bottlenecks across the customer journey. “Demand metrics that are cross-checked against operational signals,” he said. “Ask for retention cohorts, not vanity aggregates; require evidence that partnership uptake translates into integrated usage, not merely press releases.” Culturally, he says investors should resist promotional narratives and reward founders who surface weaknesses as honestly as strengths. “Honest founders who expose bottlenecks early are better partners than founders who only show successes,” he observed. “Transparency de-risks the investment more than a polished projection ever will.”
VCs reached for comment, several of whom prefer not to be named in a national daily, acknowledge that due diligence processes have tightened in recent years but concede that the pressure to deploy capital quickly can sometimes favor headline performance over deep validation. Egwuatu’s message, they say, is a timely correction. “Capital allocation is a risk decision,” one investor noted. “We need tools and disciplines that make that risk visible.”
Egwuatu also emphasized the role of prioritization in preserving capital efficiency. TEVOT does more than flag misleading metrics; it ranks high-impact interventions by feasibility and expected return on investment, producing an evidence-backed roadmap founders and investors can act on immediately. “It’s not enough to tell a founder what’s broken,” he said. “You must show what to fix first and why the fix will move the needle.” That practical orientation, he argues, turns diagnostics from a compliance exercise into a competitive advantage for both startups and their backers.
Beyond diagnostics and finance, Egwuatu warned that ecosystem actors, accelerators, incubators and corporate partners, should align their evaluation criteria. “When everyone uses different yardsticks, startups learn to optimize for the loudest voice, not the most durable outcome,” he said. “We need a shared language of traction that rewards sustainable adoption and operational clarity.”
As markets become more risk-sensitive and capital cycles normalize, Egwuatu believes the cost of ignoring unvalidated growth signals will become more acute. “Portfolios grown on narrative will reprice suddenly; portfolios grown on validated momentum will weather corrections,” he said. “Investors who adopt rigorous traction evaluation now will find higher quality, more resilient opportunities.”
In the short term, Egwuatu expects his dual work with TEVOT and UfinMD to influence how deals are sourced and monitored. “Imagine your investment team receiving standardized traction reports alongside reconciled financial dashboards,” he suggested. “That changes the conversation from ‘Is this company growing?’ to ‘Is this growth durable, profitable and reproducible?’ That’s the kind of question every investor should be asking.”
For now, his warning stands as both a critique and a call to action as capital chases the next breakout, the measures used to justify that chase must be as disciplined and auditable as the promises they underwrite. “Invest smarter, not louder,” Egwuatu concluded. “If you want true upside, demand proof of momentum, not just a good story.”
