At first glance, the new wave of AI-powered enterprise software looks like another predictable boom in Silicon Valley. But inside the venture ecosystem, the rules of competition are changing faster than the technology itself. At YourNewsClub, we’ve been tracking how investors now shape market leaders long before those leaders prove their commercial viability. Few stories illustrate this shift more vividly than the meteoric rise of DualEntry – an AI ERP startup that embodies the new logic of “capital as strategy.”
In early October, DualEntry announced a $90 million Series A led by Lightspeed and Khosla Ventures, propelling the one-year-old company to a $415 million valuation. The startup positions itself as a next-generation alternative to legacy systems like Oracle NetSuite, promising automation of routine workflows and predictive analytics for enterprise operations. On the surface, such a raise signals extraordinary revenue momentum. In reality, it reflects something far more revealing: investors are now willing to “appoint” their future champions before category maturity even exists.
Several venture sources told YourNewsClub that valuations have begun to decouple from actual traction – a deliberate shift in strategy. One VC who passed on the round claimed DualEntry’s ARR last summer was still in the low six-figure range, though co-founder Santiago Nestares disputes this and says revenue at closing was “significantly higher.” The debate itself is telling: the market is no longer anchored to revenue multiples but to the speed at which capital can secure advantage.
Analyst Jessica Larn describes this shift as part of a broader change in technological governance: “Investment decisions in AI infrastructure now resemble elite policy decisions. Capital has become an instrument of influence – if there’s enough of it, it reshapes the landscape faster than the market can form organically.”
Competitors in the AI ERP category seem to be operating under the same assumptions. Rillet raised $25 million and then $70 million just weeks apart. Campfire AI closed a $35 million Series A, followed by a $65 million Series B only months later. Many of these companies still generate only a few million dollars in ARR – sometimes less – yet investors continue to escalate their bets. They aren’t evaluating what the company is today; they’re funding what they want the company to become.
Owen Radner, who studies digital-era infrastructure, argues this is simply the power law applied at unprecedented speed: “In the age of AI, the winners aren’t defined by early revenue signals but by how rapidly they convert capital into future positioning. Capital redraws the map long before the roads are built.”
To enterprise buyers, such megafunding sends an equally significant signal: heavily capitalized startups are more likely to survive long sales cycles, making them safer vendors for mission-critical deployments. This logic helped several AI application companies secure top-tier clients in legal, financial, and industrial sectors – not because they were the most mature solutions, but because they appeared the most durable.
But vast capital reserves don’t guarantee longevity. The failures of companies like Convoy and the bankruptcy restructuring of Bird show how early overfunding can collapse a business as quickly as it elevates one. When expectations grow faster than product-market fit, execution cracks widen until the entire model breaks.
At YourNewsClub, we see “king-making” as an accelerant rather than a predictor – it amplifies everything: success, failure, scaling, burn, and volatility. It does not override the fundamentals. Capital can buy time, but it cannot manufacture relevance. Startups that find real product-market fit will scale faster with this fuel. Those that don’t will burn out sooner.
The real question is not whether VCs should continue choosing winners early. The question is whether the chosen winners can withstand the pressure. Companies like DualEntry, Rillet, and Campfire now carry the burden of validating enormous expectations – not only through narrative, but through execution.
As we see it at Your News Club, the picture is unmistakable: the market has entered a phase where capital lays the groundwork for future monopolies long before the industry has matured. To avoid repeating the excesses of the previous tech cycle, startups will need to balance abundant resources with disciplined growth; investors must tie follow-on rounds to meaningful product and revenue milestones; and enterprise buyers should evaluate not just the size of the funding but the depth of the underlying technology.
The race has already begun, but the winners are far from certain. AI markets will be harsher than earlier software cycles, and only a small fraction will survive the altitude to which venture capital has lifted them. As we see it at YourNewsClub, the true champions will be those who fuse capital, technical credibility, and operational discipline – not just those appointed by a headline-making round.