🤖 Why do AI startups sell the same equity at two different prices?
As competition among artificial intelligence (AI) startups intensifies, founders and venture capitalists (VCs) are adopting innovative valuation mechanisms to create a perception of market dominance. This approach allows some startups to proclaim themselves as unicorns, meaning valued at over one billion dollars, even though a significant portion of their capital is sold at a lower price.
Recently, this phenomenon has been observed in funding rounds such as that of Aaru, a synthetic research startup. This company raised funds led by Redpoint, which invested part of its capital at a valuation of 450 million dollars, while a smaller portion was valued at one billion. This strategy allows Aaru to present itself as a unicorn, although the average investment was significantly lower.
Jason Shuman, a general partner at Primary Ventures, points out that this tactic reflects fierce competition among venture capital firms to secure deals, where a high valuation number can deter other VCs from investing in competitors.
However, this method is not without risks. Even though the actual valuation of these startups is below the billion-dollar mark, it is expected that in the next funding round they will achieve an even higher valuation, or they will face a "down round," which could erode the confidence of partners, customers, and future investors.
Wesley Chan, co-founder of FPV Ventures, warns that this practice is a symptom of a speculative behavior in the market. "You can't sell the same product at two different prices. Only airlines can afford to do that," he comments.
Despite current demand, these startups may face unforeseen challenges that make it difficult to justify their high valuations. Jack Selby, CEO of Thiel Capital, underscores that chasing extreme valuations is a dangerous game, recalling the painful market correction of 2022 as a warning.
📌 More information: Por qué las startups de IA venden la misma participación a dos precios diferentes - TechCrunch
