AI Startups Are Counting Signed Contracts as Real ARR, VCs Admit
AI Startups Are Counting Signed Contracts as Real ARR, VCs Admit
VCs privately admit they know which AI startups are inflating annual recurring revenue by counting signed-but-unpaid contracts, free pilots, and steep multi-year discounts as if they were collected cash. TechCrunch reported that some startups claim over $100 million in ARR when only a fraction comes from paying customers. The gap between CARR and real revenue is becoming the industry's quietest open secret.
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