In today’s market, no single metric defines what a Series A round is or how to raise one. At this year’s TechCrunch Disrupt, three investors shared fundraising advice with founders, with one adding a warning: as capital floods into AI and revenue numbers are inflated to justify absurdly high valuations, a market correction could arrive as early as 2027.
This warning comes from Shailendra Singh, managing partner at Peak XV. He spoke alongside Jahanvi Sardana, partner at Index Ventures, and Jenelle Teng Wade, partner at Bessemer. Singh said, “In seed and venture capital, I’ve never seen it this misaligned.” He added that this is one of the hardest fundraising markets he has ever seen.
He continued: “The bar is extremely high to convince any top-tier institution that you’re one of the few exceptional companies that can break through; and the terms you might secure, the amount of capital you can raise, and the variability in financing terms can be enormous.” In fact, it’s now common for a company to attempt to close a round of financing at as many as three different valuations simultaneously. “This is a crazy signal of market overheating,” he said.
Sardana added, “We call it ‘tranchopalooza.’” She was referring to the practice of splitting the funding round into multiple tranches, or different batches and portions.
In addition to warnings, these investors also outlined the elements they looked for during their Series A pitch meetings. First, a compelling story: why the founder has the opportunity to build a major company. Singh added, “Founders who can attract very high-quality talent have an advantage.”
It’s also important what the founders do. Teng Wade says funding is flowing into areas such as defense, robotics, and AI infrastructure. She also notes that foundational model companies are moving toward vertical integration—taking on more of the technology stack—but there is still room for new entrants, including neo-clouds that rent out AI computing power and neo-labs focused on AI research.
Meanwhile, metrics are still helpful, but their definitions are no longer as clear as they once were, especially in an era like AI, where operating a company is extremely costly. Teng Wade cited an example of her company’s early evaluation of Anthropic, which had negative profit margins and made massive investments in computing power.
However, one of her partners believes AI will “become even larger than we previously anticipated in terms of pricing premiums for frontier models,” saying it will “replace other types of software.” The logic is that even if profit margins are negative, as long as the company ultimately becomes one of the top three players, the market size will be sufficient to deliver returns. Anthropic is reportedly preparing for an IPO at a valuation of approximately $2 trillion. The company informed investors this month that it has achieved profitability on an adjusted basis, though this metric excludes certain costs.
These investors also discussed the importance of maintaining honesty in such a market, as inflated annual recurring revenue (ARR) figures circulate beyond headline valuations. Singh said, “I tell founders that if you present a chart showing cumulative revenue or cumulative ARR, that’s a huge red flag.” He added, “It means your time-series data is flawed, because cumulative data is a big lie.” Singh also noted, “It’s crucial for companies to present themselves and engage with the market with intellectual honesty during bull cycles.”
Singh said the market is filled with "false positives" because "not every company can succeed. This is the most optimistic venture capital world I've seen in the past twenty years, and that’s usually a sign. I think 2027 will be different. I believe we’ll see a correction."
Finally, the host asked the three panelists to offer the founder at least one parting piece of advice. Singh spoke first, reminding the founder that building a company is one of the “most painful things” a person can do. He then said, “Accept it.” He also urged the founder not to rush, to remain vigilant about weak product-market fit, and to always maintain high standards for the problem they aim to solve.
Sardana said it’s important to know how to pitch, but founders must be careful not to let that dictate what they do. She added, “It’s terrifying when [founders] decide what to build based on what projects can get funded.” Meanwhile, Teng Wade said her past advice to founders—to remain conservative in projections and funding asks—is no longer as relevant.
"Now I would say, be bold and state your request directly," she said, then observe how the market reacts, "and adjust accordingly."