This Week in Startups

AI investments, VC ecosystem geography, and VC hypocrisy | E1956

May 27, 2024
Jaime Matus, a venture fund of funds manager at Invariantes specializing in AI, joins Michael Eisenberg, a partner at Aleph VC with a wealth of experience in tech investments. They dive into the current AI investment landscape, warning of a possible washout among overfunded startups due to inflated valuations. The discussion also critiques venture capital hypocrisy and explores geographical dynamics within the VC ecosystem, shedding light on how region influences funding strategies and startup success.
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INSIGHT

Vertical AI Focus

  • Focus on AI applications within established industries rather than foundation models.
  • Proprietary data and vertical integration create defensible moats.
ADVICE

AI Washout Prediction

  • Be wary of overfunded AI startups with high valuations and little revenue.
  • A massive washout is likely, similar to the dot-com bust.
INSIGHT

Monetizing Attention

  • Eyeballs and attention are monetizable, but execution is key, as seen with Google and Facebook's success.
  • Many dot-com companies failed despite having user attention.
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