{"id":173058,"date":"2025-06-06T21:14:03","date_gmt":"2025-06-06T21:14:03","guid":{"rendered":"https:\/\/entertainment.runfyers.com\/index.php\/2025\/06\/06\/why-investing-in-growth-stage-ai-startups-is-getting-riskier-and-more-complicated-techcrunch\/"},"modified":"2025-06-06T21:14:03","modified_gmt":"2025-06-06T21:14:03","slug":"why-investing-in-growth-stage-ai-startups-is-getting-riskier-and-more-complicated-techcrunch","status":"publish","type":"post","link":"https:\/\/entertainment.runfyers.com\/index.php\/2025\/06\/06\/why-investing-in-growth-stage-ai-startups-is-getting-riskier-and-more-complicated-techcrunch\/","title":{"rendered":"Why investing in growth-stage AI startups is getting riskier and more complicated | TechCrunch"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p id=\"speakable-summary\" class=\"wp-block-paragraph\">Making a bet on AI startups has never been so exciting \u2014 or more risky. Incumbents like OpenAI, Microsoft, and Google are scaling their capabilities fast to swallow many of the offerings of smaller companies. At the same time, new startups are reaching the growth stage much faster than they historically have.\u00a0<\/p>\n<p class=\"wp-block-paragraph\">But defining \u201cgrowth stage\u201d in AI startups is not so cut-and-dried today.\u00a0<\/p>\n<p class=\"wp-block-paragraph\">Jill Chase, partner at CapitalG, said on stage at <a rel=\"nofollow noopener\" href=\"https:\/\/www.youtube.com\/watch?v=QFF7DWY3G4Q\" target=\"_blank\">TechCrunch AI Sessions <\/a>that she\u2019s seeing more companies that are only a year old, yet have already reached tens of millions in annual recurring revenue and more than $1 billion in valuation. While those companies might be defined as mature due to their valuation and revenue generation, they often lack much of the necessary safety, hiring, and executive infrastructure.\u00a0<\/p>\n<p class=\"wp-block-paragraph\">\u201cOn one hand, that\u2019s really exciting. It represents this brand new trend of extremely fast growth, which is awesome,\u201d Chase said. \u201cOn the other hand, it\u2019s a little bit scary because I\u2019m gonna pay at an $X billion valuation for this company that didn\u2019t exist 12 months ago, and things are changing so quickly.\u201d<\/p>\n<p class=\"wp-block-paragraph\">\u201cWho knows who is in a garage somewhere, maybe in this audience somewhere, starting a company that in 12 months will be a lot better than this one I\u2019m investing in that\u2019s at $50 million ARR today,\u201d Chase continued. \u201cSo it\u2019s made growth investing a little confusing.\u201d<\/p>\n<p class=\"wp-block-paragraph\">To cut through the noise, Chase said it\u2019s important for investors to feel good about the category and the \u201cability of the founder to very quickly adapt and see around corners.\u201d<\/p>\n<p class=\"wp-block-paragraph\">She noted that AI coding startup Cursor is a great example of a company that \u201cjumped on the exact right use case of AI code generation that was available and possible given the technology at the time.\u201d<\/p>\n<p class=\"wp-block-paragraph\">However, Cursor will need to work to maintain its edge.\u00a0<\/p>\n<p class=\"wp-block-paragraph\">\u201cThere will be, by the end of this year, AI software engineers,\u201d Chase said. \u201cIn that scenario, what Cursor has today is going to be a little less relevant. It is incumbent on the Cursor team to see that future and to think, okay, how do I start building my product so that when those models come out and are much more powerful, the product surface represents those and I can very quickly plug those in and switch into that state of code generation?\u201d<\/p>\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\">\n<p>\n<iframe loading=\"lazy\" title=\"What VCs REALLY want from AI startups in 2025 l TechCrunch Sessions: AI\" width=\"696\" height=\"392\" src=\"https:\/\/www.youtube.com\/embed\/QFF7DWY3G4Q?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/p>\n<\/figure>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/techcrunch.com\/2025\/06\/06\/why-investing-in-growth-stage-ai-startups-is-getting-riskier-and-more-complicated\/\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Making a bet on AI startups has never been so exciting \u2014 or more risky. Incumbents like OpenAI, Microsoft, and Google are scaling their capabilities fast to swallow many of the offerings of smaller companies. At the same time, new startups are reaching the growth stage much faster than they historically have.\u00a0 But defining \u201cgrowth [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":173060,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":{"0":"post-173058","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-tech"},"_links":{"self":[{"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/posts\/173058","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/comments?post=173058"}],"version-history":[{"count":0,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/posts\/173058\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/media\/173060"}],"wp:attachment":[{"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/media?parent=173058"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/categories?post=173058"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/tags?post=173058"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}