Private jet invitations, sports tickets and extravagant gestures have become standard tactics as venture capital firms pursue leading artificial intelligence companies amid intense competition for investment opportunities.
Decagon AI, a two-year-old customer service startup, exemplifies the transformed fundraising landscape, reports Bloomberg. The company has completed four funding rounds, totalling more than $230 million, without traditional pitching processes, with firms such as Andreessen Horowitz offering investment before fundraising commenced.
Decagon currently fields unsolicited offers valuing the company at $5 billion, triple its $1.5 billion valuation from three months earlier. Co-founder Jesse Zhang, 28, described receiving Golden State Warriors tickets, MMA memorabilia and origami art containing term sheets from prospective investors.
“Investors are emailing term sheets, they’re giving verbal offers, they’re inviting founders to sport games, they’re inviting founders to race Ferraris and they’re inviting them on private jets,” said Bennett Siegel, co-founder of investment firm A* and early Decagon investor.
The funding frenzy reflects broader investment patterns in artificial intelligence. US startups have raised approximately $200 billion this year, with 41 per cent concentrated among just 10 companies, compared to less than 25 per cent in 2024. This concentration highlights venture capital’s focus on AI frontrunners, including OpenAI and Anthropic.
Anysphere, creator of AI coding tool Cursor, demonstrates the compressed timeline. Weeks after raising funds at a $9.9 billion valuation, the company received offers exceeding $18 billion. With annual recurring revenue projected to reach $1 billion, potential valuations could approach $40 billion.
The rapid pace evokes concerns about market overheating reminiscent of previous technology bubbles. Ravi Viswanathan, founder of NewView Capital, observed that today’s environment “feels like 2021,” warning: “There’s going to be lots of winners, and there’s going to be massive amounts of losers.”
Some startups resist aggressive valuations. Mercor, an AI recruiting company, has declined $10 billion in offers while maintaining its operational focus over fundraising activities.
Zhang acknowledged valuation risks, stating: “People are clearly not valuing companies on a first-principles basis. If you’re a founder, it’s really easy to fall into that trap and pump up your valuation, but for us we want to keep our valuation fairly measured.”
