LP reactions to an AI-driven fund

This week on The Data Minute, Peter sits down with Ben Orthlieb, Founding Partner at Blue Moon VC, for a look under the hood of a firm that has completely re-engineered the venture capital process using AI.

Ben explains how Blue Moon uses a proprietary tech stack to source over 12,000 teams a year and screen them down to the top 5% based on their probability of graduating to Series B, achieving performance metrics that rival top-tier firms without the massive headcount. He breaks down why the "warm intro" is obsolete, how sending AI-generated dossiers to founders results in a 75% meeting acceptance rate, and why human judgment is still the final decision-maker.

They also discuss the "hollowing middle" of the venture market, why multi-billion dollar funds struggle to innovate their own workflows, and how a small check strategy allows Blue Moon to cooperate, rather than compete, with the biggest names in the industry.

Subscribe to Carta’s weekly Data Minute newsletter: https://carta.com/subscribe/data-newsletter-sign-up/

Explore interactive startup and VC data, with Carta’s Data Desk: https://carta.com/data-desk/

Chapters
00:00 – Intro: The AI-first VC
01:27 – Blue Moon's thesis: Coverage and Winning
03:11 – How to source 12,000 teams a year without a network
05:40 – "Machine learning instinct": Optimizing for Series B graduation
07:44 – Backtesting the algorithm against top 50 Seed firms
10:12 – The 75% meeting conversion rate (and why cold email works)
12:30 – The "AI Dossier": Showing founders you did the work
14:13 – Finding outliers outside the "Credibility Pool" (The Mercor story)
16:05 – The investment process: Where AI ends and humans begin
18:43 – Does it matter who else is on the cap table?
23:36 – The "Small Check" advantage in winning allocation
25:22 – How to interview for resilience
30:20 – Why personal questions are a competitive advantage
32:31 – Follow-ons, reserves, and systematic secondaries
36:00 – Why haven't big funds copied this strategy yet?
39:54 – The "hollowing middle" of the VC market
44:40 – Why brand is the only defense against noise
49:20 – Do warm intros actually result in better investments?
52:46 – The future of the "Operator-VC" model
56:00 – What LPs really think about an AI-driven fund
59:07 – Outro

This presentation contains general information only and eShares, Inc. dba Carta, Inc. (“Carta”) is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services, and is for informational purposes only.  This presentation is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. © 2025 eShares, Inc., dba Carta, Inc. All rights reserved.