The Letter VCs Are Quietly Deleting from ARR
Startups are reporting revenue they haven't earned yet. VCs know it. Investors are cheering anyway. We've seen this movie.
You're evaluating an AI startup. The pitch deck shows $100 million in ARR. The growth curve is parabolic. The deck says they signed $100 million. What it doesn't say is that $70 million of that is "committed ARR": contracts signed but not yet invoiced, customers who haven't deployed yet, pilots that count toward the number if they convert. Subtract the gap and you've got $30 million in actual recognized revenue hiding under a $100 million headline.
This is the ARR inflation playbook, and it's running at full speed right now.
The Trick Has a Name
