Silicon Valley’s hottest AI metric is also its least trusted
- 2 hours ago
- 1 min read
BLOOMBERG — “The startup world has always been a bit more of a Wild West,” said Chuck Eesley, a professor of management science and engineering at Stanford University. “There are no audit requirements, there are no SEC definitions, so basically there’s no cop on the beat other than the VCs and acquirers doing their due diligence. So essentially, the number can mean whatever the founder needs it to mean when they walk in to do a deal or do a fundraise.”
The basic components of ARR calculations are simple: Take one month’s revenue from recurring contracts and multiply by 12 for an annual projection. It’s also not to be confused with “annual run rate revenue” — a similar, perhaps even more popular metric with an identical initialism, but that doesn’t concern itself with whether the sales are recurring.
Read the full story | BLOOMBERG
