Redpoint

Founder Accuses Sequoia of 'Dual‑Pricing' Valuation Tricks

Brendan Foody, co‑founder of AI talent platform Mercor, publicly accused Sequoia of using a “dual‑pricing” tactic in which a lead investor places most capital at a lower valuation while a smaller tranche is invested at a higher, headline price. TechCrunch and other outlets have documented similar cases where announced valuations mask lower actual entry prices — for example Serval’s announced $1B Series B while Sequoia’s lowest entry reportedly valued it at $400M, and Aaru’s announced $1B price despite a $450M lead check from Redpoint. Sequoia’s Shaun Maguire disputed characterizing the practice as a scam, saying it reflects differing price appetite among investors. The article notes 409A appraisals (used to set employee option strike prices) should reflect blended values but often skew low, and highlights broader concerns about transparency in startup valuations and fundraising communications.

Enterprise AI Enters Consumption Era; Outcomes Over Tokens

Issue #500 of the What’s 🔥 in Enterprise IT/VC newsletter (published 2026-05-30) argues that enterprise AI is moving from a subsidy-driven 'tokenmaxxing' phase into a consumption-driven Phase 2 where vendors charge for inference and CFOs demand ROI. The author warns that measuring token consumption (or running token leaderboards) incentivizes wasted effort and highlights corporate examples: an Uber COO questioning AI spend, Amazon shutting an internal AI-use leaderboard, and Anthropic rejecting leaderboard ideas. The piece recommends intelligent model routing, use of open-weight models for non-frontier workloads, hybrid and on-prem deployments for sensitive data, and outcomes-based pricing. The newsletter cites supporting data and market signals (Goldman Sachs token-growth projection, Sierra’s outcomes pricing, Harvey’s work with Trajectory/NVIDIA) and frames this as an operational and commercial shift for enterprise AI buyers and vendors.

Inference Startups Reach Decacorn Valuations on Strong AI Revenue

Investor interest in AI inference providers has surged as several companies report rapid revenue growth and pursue large funding rounds and lofty valuations. Baseten is reportedly raising up to $1 billion at an $11 billion target valuation and has ARR reported to have jumped to $600 million. Fireworks AI is in talks for funding at a $15 billion valuation and announced roughly $800 million in annualized revenue. Modal closed a $355 million Series C and said it crossed $300 million in ARR. Other inference or AI infrastructure players mentioned include Together AI and Fal. VCs cite strong revenue momentum, but margin pressure from high GPU/inference costs, reliance on leased capacity, competition for chip allocations from hyperscalers, and product commoditization remain key risks for sustaining valuations.