AI technology is According to , it helps startups become leaner and more cost efficient. Latest report from Battery Ventures. Conversely, Battery expects low-burn startups to become even more valuable if growth rates remain attractive.
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That’s an interesting paper. When we think of AI from a startup perspective, we tend to think about what AI-powered software startups themselves build. If we turn the question of what AI software does, for Battery sees a future where startups are worth many times their revenue. This could allow more emerging technology companies to receive venture-backed or full-stop support, and increase the chances that existing startups can grow to their previous valuations.
The issue is the amount of software revenue. The story of a rebound in tech stock prices from 2021’s market gluts is a familiar one by now, and startups can’t get any hotter than they once were when money was cheap and plentiful. The same view applies.
But what’s the point of a profitable startup if it can’t grow quickly? Seems unlikely. So what venture investors want above all, and founders do too, is a world where every dollar of revenue a startup generates is worth more. This situation will help the venture math pencil to draw more neatly.
It’s much easier to invest in a cash-burning startup when the revenue you’re building is worth, say, $9 instead of $6. Or $4.
The Battery argument looks like this:
Source: techcrunch.com
