Let’s talk about arr | Fortune

In 1494, for example, the mathematician and “father of modern accounts”, Luca Pacioli, wrote about Venetian merchants making their registers illegible voluntarily. At the golden age, swelling of assets and underestimated liabilities were a standard practice in a booming system. And who can forget the “channel farce” of the 2000s?

And, because some things are eternal, this era naturally has its own creative accounting practices, which I published a feature film last weekend. Currently, some of the clearest shenanigans take place around ARR, or “annual recurring income”.

“The problem is that a large part of this is essentially atmosphere income,” said a VC. “It’s not Google to sign a data center contract. It is real shit. A startup that temporarily uses your product? This is really not income.”

ARR was a favorite metric of VCs throughout the software era as a (SaaS) service, widely accepted as a trust of confidence for a stable and growing startup. Now the founders are trying to apply ROI to the AI ​​boom – and that is not suitable. These days, the founders include pilots, unique transactions or not activated contracts as recurring income, said six VC Fortune. The push comes from somewhere very human, from the desire to follow competition.

“There is all this pressure of companies like Decagon, Cursor and cognition that only crush it,” said another VC. “There is so much pressure to be the company that went from zero to $ 100 million in days X.”

At the center of all this is an essential truth: that we will have to change measures with AI and how IA companies actually work.

And in the meantime, it is worth saying: creative accounting has existed since companies have counted, but that does not mean that it is a good practice. This does not mean that he is sure or healthy for the system. And that does not mean that there will be no consequences for some at the bottom.

Read the whole story here.

Under term sheet podcast…The guest of this week is Hans Tung, managing partner of notable capital. Hans has become a VC for the first time in their twenties and continued to invest in some of the most prosperous companies of our time: names of households like Airbnb, Slack, Coinbase and Peloton, among others. He was a first donor in the musical .ly, the application that became Tiktok. Hans talks about what makes a good investor, his point of view on the anxieties of AI bubbles, and more. Listen and look here.

See you tomorrow,

Allie Garfinkle
X: @Agarfinks
E-mail: Alexandra.garfinkle@fortune.com
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Business affairs

– Brain SystemsA manufacturer of fleas AI based in Sunnyvale, California, has raised $ 1.1 billion in series G. Loyalty Management and research company And Ath Management led the tour and were joined by Tiger Global,, Value Equity Partners,, 1789 Capitaland others.

– VercelA platform for the construction of ai-native infrastructure based in San Francisco, has raised $ 300 million in Funding in series F. Accelerate And Gic led the tour and were joined by Blackrock,, No stone,, Khosla Adventures,, Schrodersand others.

– Star TherapeuticA biotechnology company based in South San Francisco developing antibodies for bleeding disorders and other diseases, raised 125 million dollars in series D series. Sanofi Adventures And Viking Global Investors led the tour and was joined by others.

– Day beforeA legal IA legal platform in San Mateo, California, for law firms for applicants, raised 103 million dollars in series B financing. Spark Capital led the tour and was joined by existing investors Andreessen Horowitz,, Speed Adventure PartnersAnd Menlo Adventures.

– Axiom MathematicsA San Francisco-based superintendent platform has raised $ 64 million in starting financing. B Capital led the Tour and was joined by Gray,, MadronneAnd Menlo Adventures.

– ScapacityA tool for recruiting athletes based in Austin, Texas, for university coaches, has collected $ 40 million in funding. Bluestone Equity Partners led the tour and was joined by others.

– RunbuggyA platform based on Tempe, Arizon, designed to connect car shipments and carriers, collected $ 37 million in series B financing. Hundred Growth Partners led the Tour and was joined by WATER Capital.

– DiscoveredAn external IAM platform based in Los Altos, California, has raised $ 35 million in an extension of seeds of existing investors Notable Capital,, Speed Adventure Partners,, Apron Technologies Capitaland others.

– CommunA developer of Tel Aviv, in Israel of satellite communication systems, raised $ 29 million in funding through seeds and A series. Green field Partners led the A series of $ 21 million and was joined by Red camera Adventures and existing investors. Teacher Amnon Shashua led the round of seeds and was joined by Q Funds and providential investors.

– CanA San Francisco-based platform designed to automate and optimize performance marketing, has collected $ 25 million in seed financing. Kleiner Perkins led the Tour and was joined by Gaorong Adventures,, Most update Capitaland others.

– OfAn agent company based in Palo Alto, California, an AI company for the governance of security, risk and compliance, has raised $ 18 million in series A series. Nea led the Tour and was joined by Anthology Funds,, Palm To drive Capitaland others.

– TieAn identity platform fed by AI based in Miami, Florida, has raised $ 10 million in series A series. Innovative Capital led the Tour and was joined by Capital of step 2,, Hawke Adventuresand others.

– Notch.cxA Tel Aviv Customer Support Platform in Israel has raised $ 7 million in starting financing. Speed Adventure Partners led the Tour and was joined by Mockery Adventures,, Liontree,, PhoenixAnd Munich Concerning Adventures.

– ClarifeyeA platform based in Paris, in France, designed for companies in order to build large-scale IA experts, has collected 4 million euros ($ 4.7 million) in pre-Grève financing. EQT Adventures led the Tour and was joined by Drysdale Adventuresand others.

– BraceletA developer of tools based in Washington, DC, designed to measure originality among employees, raised $ 1.7 million in pre-series funding. Breakup Adventures led the tour and was joined by providential investors.

Investment

– Watershed Capital agreed to acquire a majority participation in Empty SystemsAn electronic design and development company based in Ottawa, Canada. The financial conditions have not been disclosed.

– Nuveen has acquired majority participation in Ally Energy SolutionsA supplier of energy solutions based in Houston, Texas. The financial conditions have not been disclosed.

– Singe Partners has acquired majority participation in ClearwaterA supplier based in Nashville, Tennessee, cybersecurity and compliance solutions for the health care industry. The financial conditions have not been disclosed.

People

– Boundarnessa venture capital company based in Singapore, hired Christopher Walsh As a partner. In the past, he was with 7 world capital.