{"id":26411,"date":"2026-03-04T00:56:32","date_gmt":"2026-03-04T00:56:32","guid":{"rendered":"https:\/\/microvibenews.com\/?p=26411"},"modified":"2026-03-04T00:56:32","modified_gmt":"2026-03-04T00:56:32","slug":"why-ai-startups-are-selling-the-same-equity-at-two-different-prices","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=26411","title":{"rendered":"Why AI startups are selling the same equity at two different prices"},"content":{"rendered":"


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As competition among AI startups heats up, founders and VCs are turning to novel valuation mechanisms to manufacture a perception of market dominance.<\/p>\n

Until recently, the most sought-after companies raised multiple rounds of funding in quick succession at escalating valuations. However, because constant fundraising distracts founders from building their products, lead VCs have devised a new pricing structure that effectively consolidates what would have been two separate funding cycles into one.<\/p>\n

Recent rounds employing this scheme include Aaru\u2019s Series A. The synthetic-customer research startup raised a round led by Redpoint, which invested a large portion of its check at a $450 million valuation, the Wall Street Journal reported<\/a>. Redpoint then invested a smaller portion at a $1 billion valuation, and other VCs joined at that same $1 billion<\/a> price point, according to our reporting. TechCrunch was the first to report Aaru\u2019s financing<\/a>, including its multi-tiered valuation.<\/p>\n

The approach allows desirable startups like Aaru to call themselves a unicorn \u2014 valued at more than $1 billion \u2014 even though a significant portion of the equity was acquired at a lower price.<\/p>\n

\u201cIt is a sign that the market is incredibly competitive for venture capital firms to win deals,\u201d said Jason Shuman, a general partner at Primary Ventures. \u201cIf the headline number is huge, it\u2019s also an incredible strategy to scare away other VCs from backing the number two and number three players.\u201d<\/p>\n

The massive \u2018headline\u2019 valuation creates the aura of a market winner<\/a>, even though the lead VC\u2019s average price was significantly lower.<\/p>\n

Multiple investors told TechCrunch that until recently, they had never encountered a deal where a lead investor splits their capital between two different valuation tiers in a single round.<\/p>\n

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Techcrunch event<\/p>\n

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\n\t\t\t\t\t\t\t\t\tSan Francisco, CA<\/span>
\n\t\t\t\t\t\t\t\t\t\t\t\t\t|<\/span>
\n\t\t\t\t\t\t\t\t\t\t\t\t\tOctober 13-15, 2026<\/span>\n\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n

Wesley Chan, co-founder and managing partner at FPV Ventures, views this valuation tactic as a symptom of bubble-like behavior. \u201cYou can\u2019t sell the same product at two different prices. Only airlines can get away with this,\u201d he said.<\/p>\n

In most cases, founders offer a discount to top-tier VCs because their involvement serves as a powerful market signal that helps attract talent and future capital.<\/p>\n

But since these rounds are frequently oversubscribed, startups have found a way to accommodate the excess interest: rather than turning away eager investors, they allow them to participate immediately, but at a significantly higher price. These investors are willing to pay that premium because it is the only way to secure a spot on a high-demand cap table.<\/p>\n

Another startup that gave preferential pricing to its lead investor is Serval, an AI-powered IT help desk startup, according to the Wall Street Journal. While Sequoia\u2019s lowest entry price was at a $400 million valuation, Serval announced in December that its $75 million Series B valued the company at $1 billion.<\/p>\n

While the high \u201cheadline\u201d valuation can help recruit talent and attract corporate customers who may view the company as having a stronger market position than its competitors, the strategy is not without its risks.<\/p>\n

Even though the true, blended valuation for these startups is lower than $1 billion, they are expected to raise their next round at a valuation that is higher than the headline price; otherwise it will be a punitive down round, Shuman said.<\/p>\n

These companies are in high demand now, but they may face unexpected challenges that will make it very hard for them to justify their high valuations. In a down round, employees and founders end up with a smaller ownership percentage of the company; they can also erode the confidence of partners, customers, future investors, and potential new hires.<\/p>\n

Jack Selby, managing director at Thiel Capital and founder of Cooper Sky Capital, warns founders that chasing extreme valuations is a dangerous game, pointing to the painful market reset of 2022 as a cautionary tale. \u201cIf you put yourself on this high-wire act, it\u2019s very easy to fall off,\u201d he said.<\/p>\n<\/div>\n


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Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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