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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsThere is no single AI-startup valuation formula that investors apply when venture funding slows. For an existing portfolio company, a fund may keep using the price from its last financing round or update its estimate using public-company comparisons or an option pricing model. For a new investment, investors weigh current company evidence, comparable deals, capital needs, runway and financing terms. AI demand can support high prices for some companies even as funding conditions put pressure on others, so sector averages are context—not a valuation for your startup.
First, distinguish a new deal price from a portfolio mark
A financing-round price is negotiated between a company and investors in a particular transaction. A portfolio mark is a fund manager’s estimate of what an existing holding is worth between transactions. The two are related, but they are not interchangeable: a new round reflects current negotiation, while a mark may rely on older information and valuation methods that differ by manager.
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Commonfund describes quarterly portfolio marks and says managers often use the last private financing price. When fundraising intervals lengthen, that price can become a less informative guide to current value. In Commonfund’s 2023 sample of venture-manager holding marks, the average mark was 23% below the last-round price. That is a finding about the studied marks—not a discount to apply to every startup or a prediction of the price in its next financing.
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Last financing round
A recent negotiated round can provide a useful reference point because investors agreed to its price. Its relevance fades as time passes or as the company, its market, and comparable businesses change. A prior headline valuation is therefore not proof that a company could raise at the same price now.
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Public-company comparables
One approach Commonfund identifies is to apply valuation multiples from comparable public companies to a private company’s operating measures. The result depends on which public businesses and measures an investor considers relevant; different choices can produce different estimates. Public-company multiples are a comparison tool, not a guaranteed private-market price.
Option pricing for complex securities
When a company has multiple classes of securities with different rights, a simple division of headline equity value among shares may not reflect their differing economics. Commonfund describes option pricing models that use statistical inputs—including a risk-free rate, volatility and an equity risk premium—to estimate equity value across a complex capital structure. The model’s inputs and assumptions matter to the result.
Company and market indicators
PitchBook describes a valuation-estimate model that updates last-known valuations using public and private comparables and company indicators such as employee growth and company age. That is PitchBook’s description of its own product, not independent validation of its estimates or a universal method used by all investors.
What investors examine in a new AI financing
For a new investment, the question is not simply whether the company uses AI. Investors consider the evidence available for that company and the terms required to finance its next phase. Relevant factors include:
- Stage and operating evidence: Revenue, growth and other company-specific indicators help investors judge progress. A market-wide benchmark does not establish what a particular company is worth.
- Comparable transactions: Comparisons are more useful when they match the company’s stage and geography and account for the date, deal type and recency of the transaction. A headline number without that context can mislead.
- Capital needs: AI businesses may need substantial spending on talent, chips and infrastructure. The amount and timing of that spending affect how much capital a company must raise and what it needs to demonstrate before raising again.
- Runway and alternatives: A company’s cash runway and available financing options affect its negotiating position. SVB reported that tighter capital supply and slower growth were associated with lower revenue multiples and pressure on company runway.
- Security rights and deal structure: Headline pre-money or post-money values do not describe every economic term or investor outcome. Different security rights can affect how value is allocated, and financing structure matters alongside the stated price.
As practical shorthand, pre-money value is the company’s stated value before new financing is added; post-money value includes the new investment. Always identify which figure is being quoted, and read it alongside the financing terms rather than treating it as a complete description of the deal.
Why AI can hold up while the wider venture market slows
AI funding and broader venture conditions can move in different directions. PitchBook describes AI startup premiums alongside pressure and valuation discounts for many companies that have not raised recently. That market observation does not guarantee a premium for an AI company: investors still distinguish among companies and transactions.
The distribution of investment also matters. The OECD’s analysis of worldwide VC activity in 2025, using Preqin data and OECD keyword analysis, found that AI firms received 61% of total venture investment, or USD 258.7 billion. Within AI VC investment value, deals over USD 100 million accounted for approximately 73%, while AI IT infrastructure and hosting received USD 109.3 billion. These figures show the scale and concentration of investment, not a typical valuation for an AI startup. The OECD notes that deal classifications and smaller-deal records can be revised retroactively, and that VC data capture only one view of AI investment.
Large rounds can reflect the capital required for talent, chips and infrastructure, as discussed in the Q3 2025 PitchBook-NVCA report. A large financing or high headline value also brings expectations about investor returns and the company’s ability to deliver. Capital intensity can support a large raise while increasing the importance of credible milestones and a plan for the money.
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What the reported numbers can—and cannot—tell you
| Reported figure | What it describes | How to use it |
|---|---|---|
| 61% of worldwide VC investment, or USD 258.7 billion | AI firms’ share of total venture investment in 2025, according to the OECD’s analysis using Preqin data and OECD keyword analysis. | Evidence of AI’s importance in aggregate venture activity, not a company-level valuation benchmark. |
| About 73% of AI VC investment value | The approximate share represented by AI mega-deals over USD 100 million in the OECD’s 2025 analysis. | A sign that AI investment value is concentrated in large deals, not that most AI companies receive mega-rounds. |
| USD 109.3 billion | OECD-reported 2025 VC investment in AI IT infrastructure and hosting. | Context for investment in infrastructure; not a valuation multiple or estimate for an infrastructure startup. |
| USD 2.5 million median annual revenue | SVB’s H1 2025 benchmark for a Series A company’s annualized current run rate, excluding extension rounds; it is not AI-specific. | A stage benchmark from SVB’s analysis with PitchBook and SVB data, not a revenue requirement or valuation rule for an AI company. |
| More than two years | SVB’s H1 2025 assessment of how long a typical Series A company takes to increase its valuation as much as companies did in a single year in 2021. | Context for the slower pace of valuation growth; not a forecast for an individual company. |
| 23% average discount to last-round price | Commonfund’s 2023 average discount in its studied venture-manager holding marks. | Evidence that marks can diverge from past round prices, not a universal markdown or new-round discount. |
How to assess a reported AI valuation
- Identify what the number represents. Establish whether it is a newly negotiated financing price, a portfolio mark, or a vendor’s modeled estimate.
- Pin down the transaction context. Note the company’s stage and geography, the date and deal type, and whether the figure is pre-money or post-money.
- Check the operating comparison. Look at revenue, growth and other evidence, and ask whether the cited comparables match the company’s stage and business closely enough to inform the comparison.
- Account for funding needs. Consider cash runway and likely spending on talent, chips and infrastructure, along with the amount of capital the company needs to raise.
- Read beyond the headline value. Review security rights and other financing terms; a stated valuation alone does not describe the full economics or investor outcome.
Aggregate market reports do not supply an apples-to-apples valuation formula across foundation-model companies, AI applications, infrastructure providers and businesses that use AI, across stages and geographies. Neither the AI investment share nor a revenue benchmark resolves what a specific company should be worth. That depends on the company’s evidence, its financing needs and the terms investors are willing to negotiate.
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