January Ventures co-founder Jennifer Neundorfer stopped by the Equity podcast during TechCrunch Disrupt to talk about raising money in this very AI-driven market.
Founders and investors alike are excited about AI, and even Neundorfer said her company is looking at ways to use AI to make its work more efficient, such as helping with market and competitive due diligence. When it comes to companies that are starting up, I prefer founders who want to create something entirely new.
“What excites me is when I see someone using AI to do something that’s not 10 times better, because it’s actually creating a completely new experience or workflow or behavior,” she said. “That's what we're looking at: less incremental changes and more completely new behaviors.”
This is becoming increasingly difficult for founders, she said, as fatigue sets in as AI ideas start to sound the same.
“I think founders are having a breakthrough when they can tell investors why what they're doing is actually different from dozens of other startups and why they're the team to pursue it,” she said.
Regardless of whether we are in a so-called AI bubble or not, Neundorfer says a market correction is probably coming, and many companies currently receiving windfalls from investors may not survive. Winners will rise to the occasion and build “truly category-defining companies” to capture where technology is going next. “Founders who can stay ahead of the curve, build on the cutting edge of what's possible today, and build for the future,” she said. “Founders who can really read the market and understand what customers want, rather than just building what's possible. Those are the founders who will have an advantage.”
Elsewhere on the pod, she talked about her life before joining Venture, where she worked at YouTube and 21st Century Fox.
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“Most of what I did was meeting amazing technology people,” she recalled of her time at 21st Century Fox. Meeting people and talking about technology was the part of the job that gave her the most joy and helped her realize how much she loved working with early-stage founders.
But when she decided to move into investing, the learning curve was steep. In the early days, she said, she was always in touch with founders and provided detailed opinions about their companies.
“That's appropriate in some cases, but it's really about the relationship with the founders and supporting them as people, not just influencing the business,” she said.
Now she is used to work. According to PitchBook, she has served as a mentor for various organizations such as Techstars and has made over 50 investments with January Ventures, with several successful exits along the way.
Throughout the conversation, Neundorfer talked about the changing venture market, the level of funding for minorities and women, and the successful venture market outside of San Francisco. Her biggest advice to date for diverse founders actually applies to many founders building companies in this environment. It's about ignoring the noise and focusing on building a good company.
“Anything else will be out of their control and not worth worrying about.”