In my first few months working in deep-tech venture capital, I found and spoke to more than 50 founders building ‘AI’ companies.
From climate to workflow to healthcare to transports and logistics to aged care, I canvassed the AI startup space in Australia, meeting incredible founders and gaining useful insight about the Australian AI ecosystem.
But before I dive into my learnings and provide some insight into what I am now looking for (tune in to the second instalment where I explore this!), the reasons why I started this search perhaps provide an interesting precursor story.
1. The tale of the incognito founder and the hidden gem
VC’s all have their go-to method for deal-sourcing. From scavenging through the realms of Crunchbase and Pitchbook, to attending pitch events, to referrals within their own network, to founders they have previously worked with — all equally valuable methods that have resulted in successes.
However, a working theory behind this ‘hunt’ was that there are often brilliant founders and brilliant ideas that slip through the cracks.
Founders new to the startup world yet to appear on database radars, founders who have awesome ideas but no direct connection to investors, founders who are pre-pre-pre-product, pre-pre-website, pre-anything but an awesome vision and/or interesting research.
Thus, on embarking through my canvas of the AI eco-system, my intention was to thoughtfully find founders who would otherwise not appear on our radars — the incognito founder who is sitting on an idea, piece of research or platform that could truly be an impactful hidden gem.
2. Let’s address (and kill) the elephant in the room
In my first few days working in deep-tech VC, I ran into some alarming statistics that allowed me to make the very unsurprising conclusion that VC funding has a diversity problem. Globally, only 2.3% of VC funding goes to woman-only founding teams.
Similarly alarming numbers arise when looking at other forms of diversity like ethnic diversity. While Australia seems to do a little better than the global average, the problem remains and is perhaps further amplified in deep-tech spaces.
Correlatively, the second reason why I began a manual but intentional scan through the AI ecosystem was to ensure that I could find diverse founders who would traditionally have greater difficulty accessing VC funding or appearing on VC radars/circles.
This manual approach to sourcing allowed me to find brilliant people from diverse backgrounds who were very much ‘incognito’ founders sitting on beds of awesome ideas.
3. AI’s potential is still untapped
Now, maybe you’re thinking why AI? Besides my own personal passion for all things AI, AI’s potential is still untapped. When I began my search (and before ChatGPT gave generative AI and AI more broadly a kick back into the spotlight), chatter about AI had subsided and the startup community was fully engrossed in all things web3, metaverse and blockchain.
However, the reality remains that AI’s transformational impact has barely scraped the surface. A 2022 study by Data61 showed that only 25% of organisations have leveraged AI to enable automation of processes.
This suggests that there is still an abundance of vertical applications of AI as well as fascinating developments in the world of AI, particularly generative AI, that are worth investigating.
Indeed, what counts as an interesting application of or development in AI is in itself another potential article and something that, like an AI model, I have come to understand through the 50+ data points I have consumed.
Thus, the final reason why I found and spoke to so many AI founders was because I think the next big and impactful AI companies and founders are out there.
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