# Revenue Numbers Misreported by Startups

> Startups mislabel contracted revenue as real ARR, risking investor trust.
- Title: Revenue Numbers Misreported by Startups · Startup Fortune
- Summary: Startups mislabel contracted revenue as real ARR, risking investor trust. AI startups report inflated revenue numbers by using contracted deals instead of…
- Keywords: arr, contracted arr, revenue metrics, ai startups, techcrunch, spellbook, scott stevenson, investor trust, revenue reporting, startups, business, Revenue
- Source: Startup Fortune — https://startupfortune.com/the-revenue-number-startups-brag-about-might-not-be-revenue-at-all
- Published: 2026-10-20T22:05:38+00:00
- Read time: 1 min
- Topics: arr, contracted arr, revenue metrics, ai startups, techcrunch, spellbook, scott stevenson, investor trust, revenue reporting, startups, business
## Startups Mislabel Revenue
Founders post revenue numbers that may not be real revenue at all.
## TechCrunch Report Finds Issue
May 2026 TechCrunch report found AI startups label contracted ARR as plain ARR.
## Dishonest Metric Called Out
Spellbook CEO Scott Stevenson called it a dishonest metric and a huge scam.

> a dishonest metric
## Investor Concerns
An unnamed investor said startups report CARR as ARR, causing inflated numbers.

> for sure they are reporting CARR
## 70% Inflation Example
One VC reported companies with contracted figures 70% above real annual recurring revenue.

> 70% higher
## Other Tricks
Startups count free pilots and extrapolate short periods into full years.
## Public Screenshots Problem
Public revenue screenshots are easy to fake without context.
## Fix for Transparency
Ask which metric you mean and show payment processor or audit behind it.
## Key takeaway

AI startups report inflated revenue numbers by using contracted deals instead of live payments, misleading investors and customers.