Jennifer Neundorfer, co-founder of January Ventures, recently appeared on the Equity podcast at TechCrunch Disrupt to discuss fundraising in the current AI-driven market. She noted that both founders and investors are focused on artificial intelligence. Her own firm is exploring ways to use AI to improve efficiency, such as assisting with due diligence on markets and competition.
When it comes to new companies, Neundorfer expressed a preference for founders who are building something completely original. She said she gets most excited by founders using AI to create a whole new experience, workflow, or behavior, rather than just making incremental improvements. She stated they are looking for totally new behaviors, not small changes.
She acknowledged this is becoming more difficult for founders as investor fatigue sets in, with many AI ideas starting to sound similar. Founders who break through are those who can clearly communicate to investors why their company is different from the dozens of others in the space and why they are the right team to pursue the opportunity.
Regarding the potential of an AI bubble, Neundorfer believes a market correction is likely coming. She suggested that many companies currently receiving large sums of investor money may not survive. The eventual winners will be those building truly category-defining companies that capture where the technology is heading next.
She listed the qualities of founders who will have an advantage. These are founders who can stay ahead of the curve, build at the edge of what is possible today, and build for what is coming. They are able to read the market and understand what their customer actually wants, rather than just building what is technically possible.
During the podcast, she also discussed her career before venture capital, where she worked at YouTube and 21st Century Fox. She recalled that a major part of her role at 21st Century Fox was meeting people with great technology. She found that talking technology with people was the most enjoyable part of her job and helped her realize she would love working with early-stage founders.
The transition to investing had a steep learning curve. In the beginning, she would constantly check in with founders and offer detailed input on their companies. She now understands that while that can be appropriate in some cases, the role is really about the relationship with the founder. It involves supporting them as a person, not just weighing in on the business.
She has since grown comfortable in her role. She serves as a mentor for organizations like Techstars and has made more than 50 investments at January Ventures, achieving several exits.
Throughout the conversation, Neundorfer spoke about the changing venture market, funding levels for minorities and women, and successful venture markets outside of San Francisco. Her primary advice to diverse founders, which applies to many founders in the current climate, is to ignore the noise and concentrate on building a good company. She said anything else is beyond their control and the worry is not worth it.