VC REPORT
Building a Startupin the age of AI
What venture capitalists are looking for from cutting-edge AI founders
Eight investors detail what they’re looking for and what they’re seeing in the market. Read Startup 2025: Building a Business in the Age of AI for their takes on:
- How will AI solutions change the way software tools are sold?
- Is “experimental recurring revenue” even a thing?
- What captures a VC’s attention (and checkbook) in the pitch meeting?
AI startups are going to change How the world lives and works
Venture capitalists are making bets that will shape the future of AI — and AI will shape the future, period. We asked eight venture capitalists actively investing in AI what they’re looking for from founders and how they guide startups to success.
“This is a foundational technology shift that will generate significant economic growth on a global scale. When it comes to early-stage investing and company building, the opportunity is greater, so the stakes are higher.”
Liam Mulcahy
How to woo an investorIn a few basic steps
Venture capital firms hear hundreds of pitches every year, and might make a dozen investments. Against competition like that, a smooth pitch deck is not enough. We asked our panel to define the approach, the angle — the moment — that defines that rare winning pitch.
“It doesn't have to just be a grand vision. It can also be very micro, in just how incredibly succinctly they break down the fundamental customer problem. … It’s this feeling of just ‘Oh wow! I never thought about it this way.’”
Shravan Narayen
Does an AI startup requireNew measures of success?
What constitutes success as an AI-driven startup goes from first seed investment to multiple funding rounds? While fundamental metrics still matter, some investors take a particular approach to developing a business that might not even have a product yet.
“We have a bespoke metric for every company where we phrase the question as, ‘What metric would you like to go up for you to see this year as a successful one?’ And we ask for that on a monthly basis.”
Mats Olov Magdesjö
Cost, value and findingThe right fit for AI tools
Selling software services isn’t new, but the costs and use cases of AI create some interesting wrinkles. Our investor panel discusses the guidance they give around costs — which can quickly get out of hand with AI — and pricing for value. The advice ranges from downplaying the cost of goods sold to declaring “a renaissance for granular P&L statements.”
“Usage-based pricing will become far more prevalent in the market. It takes what software does, which is to enhance work, to the logical conclusion, which is charging for work done.”
Sakib Dadi
Investors don’t just want AI — They want to solve problems
VCs are quick to spot an AI solution that’s still in search of a problem, and their response is a hard pass. We asked investors to tell us what they look for, from founders and from the market, to signal which ideas are winners.
“We want to hear why this is a technology that's uniquely placed to solve this problem. … Payroll processing is not something that you'll do more of because AI speeds you up. But if you can do more sales or write more software, you will.”
Akash Bajwa
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