How AI is Changing the Venture Game in 2025
What every entrepreneur pitching investors needs to know about AI-driven venture firms
It’s that time of the year when a number of people in the venture community make predictions for the coming year. I don’t think there’s any other industry that does as much thinking about the next year’s outlook with such little introspection for the past 12 months.
But if you’re going to read one outlook piece, make sure it’s from Samir Kaji of Venture Unlocked. Here’s the link to his story on Substack. Kaji spent years at Silicon Valley Bank and then First Republic Bank, and his perspective on emerging fund managers is some of the best data-backed info you’ll find. In his prediction piece, Kaji touches on private equity’s influence on venture, the outlook for IPOs and the rise of secondaries, a trend that was similarly echoed by the partners at a recent Foley & Lardner event I wrote about.
I particularly appreciated this takeaway from Kaji, that venture is “becoming more sophisticated, diverse, and institutionalized while maintaining its core focus on fostering innovation and supporting transformative technologies.”
It’s hard to miss that AI tops many of the 2025 venture capital prediction lists, and with good reason. Look at the valuations and froth surrounding Anthropic, OpenAI and Perplexity. That’s all you need to know about investment interest in AI.
What’s often missing from venture outlook pieces is a closer look at how AI is reshaping the business, meaning not just what VCs are investing in, but how they’re making decisions.
The strategy of AI in venture
AI’s role in venture isn’t new. In fact, a 2019 Forbes piece highlighted early movers in this space, such as SignalFire, which continues to leverage AI to analyze over a million data points for sourcing deals and supporting portfolio companies. Others, like EQT Ventures with their Motherbrain platform, have showcased how machine learning can improve decision-making and identify potential deals.
While the Forbes piece is dated, the trend has only gained momentum. AI-powered tools are pretty much standard operating procedure in venture, reflecting the growing need for efficiency and scale in a competitive, data-saturated industry.
Check out Venture5 Media, which highlights how AI is used throughout venture. From deal sourcing and portfolio management to analyzing founder personality traits, AI is helping firms operate with efficiency. It’s a reflection of the maturity of the venture landscape, where relationships and intuition are increasingly complemented by data and machine learning.
Looking back before looking ahead
When I started covering venture in the late 1990s, the industry operated very differently. Deals were often based on relationships, with investors preferring founders they knew or those with proven track records. Gut feel and trust drove a lot of decisions. Today, relationships are still important, but data and AI are essential tools at many firms for identifying hidden gems in the startup ecosystem.
AI hasn’t replaced an investor’s intuition, but it’s augmenting the process. By casting a wider net and enabling faster decision-making, AI offers firms a competitive edge, when used thoughtfully.
What this means for founders?
So, what does all this mean for founders? As more VCs embrace AI, it’s important for entrepreneurs to adapt. The basics haven’t changed, but the way you present your startup idea to investors might need to.
Here’s what founders should keep in mind when pitching in the AI-heavy venture landscape of 2025:
Be Data-Ready. Make sure your data is clean and accurate. VCs who rely on AI will get drawn to startups that display traction and metrics.
Craft Your Narrative. AI might put you on a VC’s radar, but a compelling story is what will close the deal. Think of it this way, AI might get you in the room, but your story will keep you there.
Ask Questions. If a VC firm uses AI, ask how it impacts their decision-making process. Knowing how various firms use it can help you tailor your pitch effectively.
AI is changing how venture operates, but the fundamentals remain. Great ideas, strong teams and a clear vision still matter. For founders, success in 2025 will come when you adapt to these shifts while staying true to what makes their businesses stand out.
If you’re a founder looking to refine your pitch or craft a stronger story to connect with investors, drop me a line. I’d love to help you stand out
And I’d love to hear your thoughts. For instance, what do you think about the rise of AI use in venture? Is it an opportunity just for early-stage startups? And what ethical considerations are there as AI becomes more integrated into the investment decision-making process?
Stay tuned for more posts and an upcoming podcast episode where I look into how AI-driven firms are transforming the VC landscape.