---
title: "Dealroom (The Information) — The argument in favor of tranched rounds"
url: https://stacklist.com/card/5df5f47d-ad26-4c09-b5b2-2fbb1c328924
source_url: "https://dealroom.co/news/info-qtamha-the-argument-in-favor-of-tranched-rounds"
stack: https://stacklist.com/c/finance/stack/af94eecb-fc01-43a7-8b78-f12bfa15d76b
summary: "Stephanie Palazzolo argues that multi-tranche rounds at different valuations have become standard in AI funding, with defenders citing massive compute costs while critics warn of inflated headline valuations. The practice involves corporate investors like Nvidia taking expensive tranches while other investors lead cheaper ones, affecting how deals are recorded in databases like Dealroom."
tags: "venture-capital, ai-funding, tranched-rounds, valuation, startup-financing"
key_entities: "Stephanie Palazzolo (person), The Information (organization), Dealroom (organization), Nvidia chips (technology), Nvidia (organization), OpenAI (organization), DeepSeek (organization), Pathos AI (organization), Bristol Myers Squibb (organization), Warp Sciences (organization), Lightspeed (organization), tranched-rounds (concept), headline-valuation (concept)"
classification: "analysis"
content_hash: "sha256:f4b893a84de7aaf5efe009dd4eb35795cdb14c11a69bafb2d5bc16cc64eaa096"
acp_version: "0.2"
token_counts_approximate: 364
visibility: public
agent_accessible: true
status: "final"
---

# Dealroom (The Information) — The argument in favor of tranched rounds

Stephanie Palazzolo argues that multi-tranche rounds at different valuations, once unusual, are now standard in AI, with hot rounds having three or more tranches. Critics say big VCs push smaller firms into the pricier tranche and founders get a headline valuation even though much of the money came in cheaper. Defenders point to compute needs: one investor says a young startup renting about 2,500 Nvidia chips for two years may need $150M-200M, and tranching avoids either heavy dilution or a $1B+ price that deters return-seeking VCs. Corporates such as Nvidia often take more than 25% of the expensive tranche but avoid leading; one investor said their firm puts most money in the cheap tranche and 'leads' the pricey one with a few million in name only. The newsletter also notes DeepSeek closing a US$14.6B round and OpenAI aiming to close a $30B round at up to $1.25T pre-money, plus deals including Pathos AI ($237M Series E at $3B post, led by Bristol Myers Squibb) and Warp Sciences ($215M at $865M post, led by Lightspeed). Caveat: the sourcing on tranche practices is anonymous investors. Why it matters Directly relevant to how Dealroom records AI rounds: a single headline valuation can hide two or three prices, nominal leads and heavy corporate participation, which affects valuation, lead-investor and round-size fields. The deal list also flags several rounds to check against Dealroom. Read the full article: The Information