AI Startups Are Counting Signed Contracts as Real ARR, VCs Admit

Technology September 08, 2026 07:00 PM

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.

AI Startups Are Counting Signed Contracts as Real ARR, VCs Admit

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