Anthropic, seeing voracious demand for shares, is clamping down on a certain kind of investment

Anthropic, the AI startup generating significant buzz, is taking a firmer stance on its investment strategies as demand for its shares escalates. According to sources familiar with the situation, the company has expressed dissatisfaction with a popular investment vehicle known as special purpose vehicles (SPVs), which have been heavily marketed to investors eager to capitalize on the AI surge. Currently in the midst of a funding round aiming to raise approximately $5 billion at a staggering valuation of $170 billion, Anthropic has instructed major investors, including Menlo Ventures, to utilize their own funds rather than resorting to SPVs like in previous rounds. This shift indicates that Anthropic now possesses the leverage to dictate terms, largely due to the overwhelming interest in its private shares. SPVs allow investors to pool capital for single investment opportunities. While they offer convenience and can attract a broader array of non-institutional investors, many companies prefer direct relationships with their investors, making SPVs a less desirable option. Recently, investors have taken to social media to share experiences of being pitched SPVs loaded with exorbitant fees. Michelle Lim, an angel investor, noted a minimum investment requirement of $100,000 to $1 million, with fees reaching as high as 16%. Venture capitalist Sarah Guo criticized the proliferation of these multi-layered SPV brokers, stating they often lack direct connections with companies and can exploit investors. Although her comments were not specifically about Anthropic, they highlight the potential pitfalls associated with SPVs. In a previous funding round, Menlo Ventures led the charge with a $500 million investment, utilizing part of that sum through an SPV to facilitate the transaction. However, this time around, Anthropic is more selective in its investment approach, likely due to the heightened demand from potential backers. Reports indicate that the startup has experienced a surge in revenue, primarily driven by its Claude models, which excel in software code generation and deployment. Anthropic is reportedly on track to attract top-tier venture capitalists committed to its long-term growth. With the current round being five times oversubscribed, the company holds more influence than in earlier funding efforts. Menlo's participation in this round is expected to be reduced to about $120 million, a notable decrease from previous commitments. As investor enthusiasm for AI continues to soar, Anthropic's valuation appears to be a compelling option compared to competitors like OpenAI, which is aiming for a staggering $500 billion valuation in an employee stock sale.