Growth claims and margin risks in startup pitches

An observer who says they’ve heard hundreds of startup pitches in 2026 describes many companies growing revenue more than tenfold that year, alongside high valuations and plentiful mergers and acquisitions. The same account flags low or negative gross margins when reselling tokens, nonstandard accounting, revenue concentration and high “contracted ARR”—annual recurring revenue—that isn’t live yet. Other observations include small teams, an apparent trend toward usage-based billing and software companies presenting themselves as AI tools to appeal to investors. Expensive computing resources, limited availability and thin technical differentiation also feature among the concerns.