--- title: Contracted ARR considered harmful | daily.dev description: CARR (Contracted Annual Recurring Revenue) is being used by AI startups to inflate revenue metrics in fundraising decks. Unlike standard ARR, CARR counts... canonical: https://daily.dev/posts/contracted-arr-considered-harmful-dlrd3hyac twitter:card: summary_large_image twitter:site: @dailydotdev og:type: website og:site_name: daily.dev og:title: Contracted ARR considered harmful | daily.dev og:description: CARR (Contracted Annual Recurring Revenue) is being used by AI startups to inflate revenue metrics in fundraising decks. Unlike standard ARR, CARR counts... og:url: https://daily.dev/posts/contracted-arr-considered-harmful-dlrd3hyac og:image: https://api.daily.dev/og/posts/DLRD3hYAc.png og:image:alt: Contracted ARR considered harmful og:image:width: 1200 og:image:height: 630 og:locale: en --- > ## Documentation Index > Fetch the complete documentation index at: https://daily.dev/llms.txt > Use this file to discover all available pages before exploring further. # Contracted ARR considered harmful **[Tech Lead Digest](https://daily.dev/sources/techleaddigest)** · 4 min read · 2 upvotes · 0 comments ## Summary CARR (Contracted Annual Recurring Revenue) is being used by AI startups to inflate revenue metrics in fundraising decks. Unlike standard ARR, CARR counts future contracted revenue at peak rates — including step-up deals and unstarted contracts — creating a 3x or more gap between reported figures and actual cash-generating revenue. The 11x case study illustrates how a startup reported ~$10M ARR while only ~$3M came from contracts that survived past trial periods. The author argues the metric is optimized for fundraising velocity, and that reporters, employees, customers, and founders are all harmed when inflated CARR numbers circulate unchallenged through media and pitch decks. ## Full article daily.dev links to this article rather than hosting it. Read it at the original source: ## Similar posts on daily.dev - [How VCs and founders use inflated ‘ARR’ to kingmake AI startups](https://daily.dev/posts/how-vcs-and-founders-use-inflated-arr-to-kingmake-ai-startups-okpdlzzxh) · TechCrunch · 1 upvotes · 0 comments - [ARR Doesn't Mean What It Used To](https://daily.dev/posts/arr-doesn-t-mean-what-it-used-to-j37osmpwk) · Tech Lead Digest · 2 upvotes · 0 comments - [A16z VC wants founders to stop stressing over insane ARR numbers](https://daily.dev/posts/a16z-vc-wants-founders-to-stop-stressing-over-insane-arr-numbers-vl07sgcdj) · TechCrunch · 0 upvotes · 0 comments --- Tags: [#venture-capital](https://daily.dev/tags/venture-capital) [View this post on daily.dev](https://daily.dev/posts/contracted-arr-considered-harmful-dlrd3hyac) ```json {"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://daily.dev/#organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180},"sameAs":["https://twitter.com/dailydotdev","https://github.com/dailydotdev","https://www.linkedin.com/company/daily-dev-ltd"]},{"@type":"WebSite","@id":"https://daily.dev/#website","url":"https://daily.dev","name":"daily.dev","publisher":{"@id":"https://daily.dev/#organization"},"potentialAction":{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https://daily.dev/search?q={search_term_string}"},"query-input":"required name=search_term_string"}}]} {"@context":"https://schema.org","@type":"TechArticle","headline":"Contracted ARR considered harmful","url":"https://daily.dev/posts/contracted-arr-considered-harmful-dlrd3hyac","mainEntityOfPage":{"@type":"WebPage","@id":"https://daily.dev/posts/contracted-arr-considered-harmful-dlrd3hyac"},"datePublished":"2026-04-27T00:03:07.620Z","dateModified":"2026-04-27T00:04:06.750Z","description":"CARR (Contracted Annual Recurring Revenue) is being used by AI startups to inflate revenue metrics in fundraising decks. 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