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Brendan Foody, co‑founder of the AI talent platform Mercor (last valued at $10 billion), used X to denounce Sequoia Capital for allegedly structuring investments in two tranches at vastly different valuations, a practice he termed the “Sequoia scam.” The allegation adds to a wave of founder complaints about opaque VC tactics.Foody’s Public Accusation of Sequoia’s Dual‑Pricing SchemeFoody wrote that in the past six months he observed “a half dozen rounds where Sequoia invests in 2 tranches. Everyone pretends they only did the higher valuation.” He argues that founders misrepresent the lower‑priced tranche to employees and angels, creating a misleading perception of market dominance.Valuation Gaps Highlighted by Recent Funding RoundsAI‑driven helpdesk startup Serval announced a $75 million Series B at a $1 billion headline valuation, but Sequoia’s lowest entry point was reported at $400 million (Wall Street Journal).Market‑research AI startup Aaru disclosed a $1 billion headline price while lead investor Redpoint backed it at a $450 million valuation.These examples illustrate a “blended” price that is often far lower than the public figure used for PR and talent recruitment.Implications for Startup Transparency and Employee CompensationJason Woo, partner at Armanino, notes that employee stock options should be priced based on the blended valuation, but 409A appraisals—used to set strike prices—are traditionally low, creating a structural incentive to keep option costs down. Consequently, employees may benefit from lower tax bills but remain unaware of the true market perception.Angels, unlike employees, receive no independent appraisal, leaving them reliant on the numbers founders choose to disclose.Future Outlook for VC Valuation PracticesSequoia’s Shaun Maguire defended the two‑tranche approach as a market reality, claiming it reflects a “repeated game” where VCs avoid overpaying for hot deals. However, the practice raises questions about ethical standards and could prompt tighter disclosure norms if founder backlash intensifies.Industry observers suggest that continued scrutiny may lead to more standardized reporting of tranche‑level pricing, greater alignment of 409A valuations with headline numbers, and heightened vigilance from founders and employees alike.

The LeadWirestock, a company that transitioned from stock photography to AI data provision, has secured $23 million in Series A funding to expand its multi-modal data supply business for AI labs. The company now serves six of the largest foundation model makers and has built a platform with over 700,000 artists and designers contributing creative assets.The Creative Data TransformationWirestock previously helped photographers distribute and sell their work on stock photography services like Shutterstock. In 2023, the company pivoted to becoming a data provider, supplying datasets of images, videos, design assets, and gaming and 3D content to AI labs. The platform operates similarly to freelance marketplaces like Fiverr, with artists completing tasks for data collection.Financial Growth and Market PositionThe $23 million Series A round, led by Nava Ventures with participation from SBVP (co-founded by Sheryl Sandberg), Formula VC, and I2BF Ventures, brings Wirestock's total capital raised to approximately $26 million. The company currently has an annual run-rate revenue of $40 million and has paid out $15 million to its contributors. Wirestock employs 60 people and will use the new funding to hire for research, engineering, and product roles.The Creative AI Data Market ExpansionDemand for data supply services is soaring as AI labs compete to enhance their models. Companies like Surge, Scale AI, and Mercor have built billion-dollar businesses on dataset demand, while new startups such as Micro1, Human Archive, and Human Native AI also partner with top AI model makers. Wirestock focuses specifically on providing data for creative use cases like image and video generation, with plans to expand into audio and music modalities.Future of Multi-Modal Data in AI DevelopmentLooking ahead, Wirestock is building enterprise software for AI labs to collaborate on datasets and plans to continue expanding its creative asset offerings. Freddie Martignetti, founder of Nava Ventures, emphasized the importance of multi-modal data for creating more human-like AI systems. As AI models evolve, the availability and quality of diverse training data will remain critical differentiators in the competitive AI landscape.

The Next Phase of Robinhood's Retail Venture Strategy Robinhood is gearing up to launch its second retail venture fund IPO, RVII, just two months after listing its first venture fund on the stock market. The company has filed a confidential registration, a standard regulatory step that allows it to work through the approval process before making details public. Expanding Investment Scope Unlike its first fund, which currently holds stakes in 10 late-stage companies — Airwallex, Boom, Databricks, ElevenLabs, Mercor, OpenAI, Oura, Ramp, Revolut, and Stripe — RVII will cast a wider net, investing in growth-stage and early-stage startups. This distinction is meaningful, given that early-stage startups are younger and carry more risk but also offer the potential for greater returns. Fundraising and Performance The fundraising target for RVII has not yet been set. For its inaugural fund, Robinhood sought to raise $1 billion but ultimately fell several hundred million short of that goal. Despite the shortfall, the first fund has performed strongly, with its stock price more than doubling since its debut on the NYSE at $21 a share in early March. Democratizing Startup Investing The premise behind both funds addresses a longstanding gap in who gets to invest in startups. Under federal rules, only 'accredited' investors — those with a net worth exceeding $1 million or annual income above $200,000 — can put money into private companies. RVI and RVII are designed to change that, letting anyone invest in a portfolio of private startups through a regular brokerage account. The Future of Retail Investing in Startups Robinhood CEO Vlad Tenev envisions a future where retail investors can participate in the earliest stages of startup growth. 'The aspiration is, if you're a company raising a seed round and a Series A round — so, just first capital — retail should be a big chunk of that round, much like it now is in the public markets,' Tenev said. The Potential Impact If Tenev's vision takes hold, it could fundamentally change how startups raise their earliest capital, with retail investors eventually sitting alongside venture firms, including in the earliest rounds, where the biggest returns are often made.