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Why Investors Fund Startups Without Traction: Mira Murati’s $1B Raise

  • Writer: asantos31
    asantos31
  • Jun 26
  • 5 min read

This week, headlines erupted when Mira Murati, the former CTO of OpenAI, reportedly secured funding for her stealth AI startup at a $1 billion valuation despite not having a product, pitch deck, or revenue stream in place.  (The Information, 2025).


To some, it sounds like a parody of Silicon Valley excess. To others, it's a bold confirmation that the power of pedigree, vision, and momentum has replaced the traditional pillars of traction-based investing.

But this moment isn't just about Mira. It's a signal about where early-stage investing is headed, who gets funded, and why exits, not traction, may be the ultimate goal.


FUNDING WITHOUT TRACTION

The MVP Playbook Is Being Rewritten


For decades, founders have been told: "Build an MVP, prove demand, grow revenue, then raise." But Mira flipped the script.

She was raised on trust, not traction.

Her fundraising didn't hinge on user metrics; it hinged on her proximity to frontier innovation and her role as one of the few public-facing voices behind OpenAI's rise.

According to PitchBook data, nearly 30% of AI startups in 2024 raised pre-seed or seed rounds without a product, a significant shift from 5 years prior. (PitchBook, 2024).

Investors were betting on a person, not a business. And that person happened to be one of the most connected minds in the field of AI today.



Why Investors Fund Startups Without Revenue:


Here's what's going on behind the scenes, and why the Mira Murati deal is more strategic than sensational:


1. AI Is a Power Industry


AI has massive upside potential. One winner, such as OpenAI, Anthropic, or xAI, can potentially return an entire fund. Sequoia: "The distribution of returns in AI is even more extreme than in traditional software. Investors are leaning in early, despite the risk." (Sequoia Capital, 2024).


2. The Founder Is the Moat


As generative AI quickly becomes commoditized, differentiation lies in effective leadership. Mira isn't just another founder—she's the architect of ChatGPT's public rollout and a proven AI operator.

Tomasz Tunguz (2023) explains, “At the pre-traction stage, investors underwrite credibility and vision, not models or roadmaps.”


3. Dry Powder Is Real-If You're Elite


While many founders are facing longer fundraising cycles, top-tier funds are sitting on over $300 billion in dry powder, according to Preqin (as of Q1 2025). They are eager to back "brand name" founders before the next breakout wave.


4. Exit Optionality Drives Strategy


Here is another reason why Investors Fund Startups without revenue. In high-conviction markets, funds are not just betting on products; they're placing early claims on teams that are likely to be acquired for their IP, talent, or brand narrative.

Mira's funders aren't looking for her to build a lifestyle company. They're betting she'll be acquired or go public, and they want cap table equity before the prototype is even built.

Bain & Company (2024) found that 59% of early-stage tech acquisitions are driven by IP and team, rather than profitability.


So… What If You're Not Mira?

Now, let's be real.


You may not have been part of the OpenAI leadership team. But that doesn't mean you can't learn from what's happening at the top of the ecosystem. Your strategy should adapt to this new dynamic.



Here's what this shift means for the rest of us:


1. Build a Strong Founder Narrative

Even if you don't have a billion-dollar track record, your insight, background, and reason why still matter deeply; investors now care more about why you and why now than ever before.

According to First Round Capital's Founder Survey, 63% of early-stage investors rank "founder-market fit" above traction when making a pre-seed decision. (First Round Capital, 2024


2. Start With Exit Thinking

Investors backing high-profile founders are doing so with a clear exit strategy in mind. The same applies to you. Know whether you're aiming to be a strategic acquisition, private equity roll-up, or IPO candidate and align your ops accordingly.

Bain & Company's 2024 M&A Outlook found that 59% of early-stage tech acquisitions were driven by IP and team rather than profitability.(Bain & Company, 2024).


3. Relationships > Revenue (in Some Stages)

In this era, the strength of your network can be just as crucial as your profit and loss (P&L) statement. Advisors, investors, co-founders, and early evangelists all contribute to the perception of viability and vision.


4. Vision + Velocity = Valuation

A compelling idea in the right market, backed by the right team, can now command outsized valuations before customers ever show up.

In 2023, Hugging Face raised a $235 million round at a $4.5 billion valuation, while still burning cash and focusing primarily on open-source growth. (TechCrunch, 2023)


Want to know how we can help you! Read here



Caution: Overvaluation Has a Cost


Raising money on a story means you must deliver the story arc. Fast.

When you raise at a $1B valuation on Day 1, your future exit better be a multibillion-dollar outcome, or your early investors (and team) face painful dilution or down rounds.

As VC Jason Lemkin recently said: "Every time a founder raises at a crazy valuation, they better understand they've now committed to a crazy exit." Jason Lemkin (2023)


In Mira's case, she likely has the pedigree, access, and capital to navigate that pressure. However, for emerging founders, it's critical to strike a balance between bold valuation and strategic realism.



The Mira Murati raise is not just a funding story; it's a future exit story.

The best investors don't just write checks; they also make informed decisions. They build chessboards. They're placing bets with M&A and IPO routes already in mind.

And you should be, too.

So the next time someone asks you, "How much traction do you have?"—try flipping the frame:

"I'm building something investors can exit from. That's the real metric."


At Into The Next, we help founders bridge the gap between a growing business and a sellable asset. Whether you’re raising your first round or planning your final one, we're here to get you into the next chapter.

Want to talk about building investor confidence and an exit-worthy story, even without a product? Let's chat.


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