Recently I was in discussions with a startup founder who informed me their company's valuation was over $20 million. At this point he only had an idea - no team, no product, no revenue, no traction.

For many founders, they believe having a high valuation is a sign of success. In fact, this may doom their chances of building a successful company.

What they often don't realize is a high valuation means higher expectations of what the founder must accomplish in order to provide an ROI to the investor.

If the founder has no track record of success, an investor is unlikely to believe they can accomplish what is required to deliver that ROI.