Startups Are Using Questionable Metrics in an Effort to Raise Capital

Venture capitalists’ wallets are still open for artificial intelligence startups. But as the field has gotten more crowded, some startups that are raising new capital have leaned on metrics that don’t exactly scream confidence in their business prospects. They include the number of AI PhDs on staff, how many Nvidia AI chips the company has, and a fuzzier measure of potential revenue.

Some of this behavior reminds VCs of WeWork. The office-leasing company infamously used “community adjusted” earnings before interest, taxes, depreciation and amortization to make itself seem like less of a cash-incineration machine. The ploy obviously didn’t work.

AI startups aren't being as extreme, but VCs tell me that nontraditional metrics are showing up in pitch after pitch. Here are some of the most common ones: