Video summary
Melinda Elmborg, a veteran venture capitalist with nearly a decade of experience, highlights a significant shift in the startup ecosystem driven by artificial intelligence. While VCs have long utilized AI tools to streamline their own evaluation processes—such as recording meetings and automatically generating investment memos—the most exciting development is how founders are now adopting these technologies during their fundraising rounds. Elmborg emphasizes that this adoption allows entrepreneurs to reclaim valuable time previously lost to administrative tasks, enabling them to focus on high-value activities like building products and engaging directly with customers. She argues that every hour spent on fundraising is an hour diverted from actual value creation, making the integration of AI a strategic necessity for sustainable growth.
To illustrate these benefits, Elmborg shares practical examples of how founders are leveraging large language models to accelerate their preparation. One specific case involves creating complex financial plans and data rooms; by using a custom template and simple prompts, a founding team reduced what would typically take weeks of manual Excel work into just an hour. Another compelling example features the CEO of Solless Care, who built an AI avatar using Claude Code to act as a 24/7 representative for investor meetings. This digital twin could answer detailed questions about the company's data room, handle challenges regarding market competition, and even provide transparency on the source of its information, allowing the human founder to step back from answering repetitive queries and instead focus on building genuine relationships with investors.
However, Elmborg also notes an emerging trend where founders attempt to "game" AI evaluators by formatting pitch decks in ways that are readable only to computers rather than humans. She describes this as a necessary evolution where AI systems must eventually converse with other AI systems during the fundraising process. Her ultimate hope for this technological trajectory is to create a more efficient and equitable market where investment decisions are made faster and clearer, reducing reliance on the art of the pitch and shifting the focus entirely to the quality of the company being built. By automating the friction-heavy aspects of fundraising, both founders and investors stand to gain, ensuring that capital flows more smoothly to those who truly deserve it based on their product execution rather than their presentation skills.
Read the full video transcript
Thank you very much. And um maybe adding
that I was on uh parental leave for most
of that year, but we we managed to do a
lot of investments anyway. Um yeah, so
hi everyone. Um
h I want to let's uh get this one out of
the way. So I've been in venture capital
for like almost the past decade getting
close to that that milestone.
uh and uh have seen it change a lot over
the past 10 years and of course uh AI
now is is the big thing uh changing
and uh so what I wanted to talk about is
um that we have seen for the past two
three years uh VCs they use a lot of AI
in uh in in u when they evaluate
startups and it's a lot about like
datadriven VCs and they record meetings
and automatically create investment
memos or whatever and uh there's a lot
of tools for them to find potential
investments online and like yeah it's
there's a lot going on out there for the
venture capitalists but what I'm seeing
now in our portfolio as they go out and
they raise their their next round uh is
that the founders start to use AI as
well um to prepare their fundraising
during the fundraising and yeah
throughout the whole process. And um and
and what I really like about that and
what makes me really excited is that
then they can spend more time instead of
speaking with customers and building
product and which is actually value
creation because just going out
fundraising and spending time on
fundraising it is usually not fun for
the founders and it just takes away time
from what actually creates value.
And because every hour fundraising is an
hour away of creating value for your
company, growing your company, and
that's all that matters.
And so I wanted to show uh some
examples. I was hoping to do a demo, but
it didn't work out. But you'll see a
nice screenshot. Um and uh so for
example uh when it comes to the
preparation of the fund raise so for
example doing a financial plan you need
to have like a three-year plan um or
some investors require even a five-year
plan and then you need to sit in your
Excel sheet and especially if you're not
a finance person that takes a lot of
time and maybe you need to get a
consultant and it just takes so much
time writing all those formulas in all
those cells uh and now uh so this is
what I did together with um with a
founding team. Uh just prompting Claude
and I have a template that I created
back in 2020 by hand. H spent like a
week on it uh for financial for doing a
financial plan that they can use in
their fundra. And now with a simple
prompt take the template here is our
financial res results for the past
month. this is our reporting and then
create a a financial plan so that we
triple revenue every year and then do
everything with formulas. I don't want
any hard-coded sales so I can play
around with it and then boom it was done
and then some tweaks and everything of
course but in an hour we were in a
really good place uh with that financial
plan. uh so already that can can save
massive time also creating the entire
data rooms with like market analysis and
everything uh isn't obvious for LLMs
if they are prompted right I would say
very important uh and then we have so
this is VI uh he is the CEO and
co-founder of solless care so he's doing
a uh life insurance but AI native
digital native really for for a new
generation of of life insurance really.
And what he did so he went out
fundraising two months ago or something
and he had his whole data room with a
lot of information and then he had had
to have all these meetings with
investors asking a lot of questions and
answers were mostly in the data room. So
what he did was that he created an
avatar
uh with claude code. uh so he put this
together in an evening uh where the
investors can ask uh questions. So here
for example I put in the question of h
explain more about the team or something
and then explaining everything and you
could even challenge it like oh are you
sure you're better than competitors or
what about this and that and the market
and um and he even put in uh the uh
these guard rails with the confidence uh
level like how much of the data that the
answer contained that was from the data
room and even like if you were asking
questions that had nothing to knew like,
oh, how many siblings do you have,
Vulture? Then it said like, oh, this is
not relevant. Um, so he he really
developed it. And then what was great
was that I had to log in to access this.
So he could see which investors asked uh
what questions. Um, and it could even
help him then see, okay, this is how the
best way to answer a question. So I'll
do the same when I have the meetings. So
really during the fundra being able to
spend more time with the relationship
building and not like these are our
metrics year 1, year two, year three uh
which is not uh that doesn't provide as
much for for the relationship building
because when it comes to fundraising a
lot of it is like vibing with the
investor and the investor vibing with
the with the entrepreneur.
Um so those were two example. I I I have
one more example. Um but a lot of uh
founders of course uh have started doing
pitch decks with AI so that claw just
poops out a a pitch deck and I say poop
because usually it's not very good
quality.
Um and um but then what he was uh saying
that what he wanted to do is to put uh
text that humans cannot read uh but that
the the computer will read so to say or
the AI will read uh to kind of hack the
investors that use AI to evaluate his
pitch deck. Um, so now we're starting to
get into this um place where the AI's
got to speak with AIS for fundraising.
And what I hope it can lead to longer
term is that founders don't need to
spend time on on fundraising and
investors can have quicker, faster, more
clear investment decisions to the
founders. Um, and so that we can have a
much more like smooth fundraising
market. uh and that those who should be
funded will get funded. So it depends
less on how good are you at pitching in
meetings and it's more about how uh how
how good are you at building the
company.
Um so yeah that was all I had. So uh I
think it's just um advantages for both
sides both founders and uh investors.
Great. Thank you.