Precursor VenturesA classic pre-seed and seed stage venture capital firm

The Danger of Chasing Fake Growth 📉

12 Aug 2026 · 1 min

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In this monologue, Precursor Ventures warns that the founder‑investor feedback loop creates intense pressure on startups to display outsized growth. While some companies can achieve rapid expansion honestly, many feel compelled to inflate metrics—such as ARR or revenue growth—to secure funding. The speaker notes that this rationalization (“we’ll fix it later”) leads to dodgy reporting processes, and ultimately a collective chase after targets that are not real. He predicts that future retrospectives will reveal companies whose reported growth was fabricated, highlighting the systemic risk of a culture that rewards fake growth over sustainable performance.

Chapters

Founders and investors exist in this ecosystem, which is a feedback loop. If investors are like, I want to see more growth, some businesses can really achieve that growth through honest means. And other people say, look, they rationalize, if I can just get this round done, and if we fudge the growth, we'll go back to doing it the right way on the other side. And I think we generally know how that happens. I do think the pressure right now that companies are under to show these crazy growth rates, and the irony is sometimes you learn after the fact that the crazy growth rate was never real, or the crazy growth rate itself was a product of dodgy processes, and suddenly everybody has engaged in collective bad behavior chasing a target that was never real. I'm 100% certain there will be companies whose ARR, revenue, reported growth ramps, we will look back on them and say, oh, that wasn't what we thought it was, and maybe we shouldn't have all been chasing that.