January Ventures co-founder Jennifer Neundorfer stopped by the Equity Podcast during TechCrunch Disrupt to discuss fundraising in this very AI-focused market.
Founders and investors are obsessed with AI, and even Neundorfer said his company is looking for ways to use AI to make their jobs more efficient, such as helping with market and competitive due diligence. When it comes to building companies, she has a preference for founders looking to create something entirely new.
“Where I tend to get excited is when I see someone using AI to do something that’s not 10 times better. It’s actually creating a whole new experience, a new workflow or a new behavior,” she said. “That’s what we’re looking at. Less incremental change and more completely new behavior.”
It’s becoming increasingly difficult for founders because fatigue, she said, has set in as more and more AI ideas start to sound similar.
“Where I think founders succeed is when they can explain to investors why what they’re doing is really different from the dozens of other startups doing this and why they’re building the team to pursue this,” she said.
Whether or not we’re in the AI bubble, Neundorfer says a market correction is likely coming and many companies currently benefiting from investors’ money may not survive. The winners will navigate this moment by creating “truly category-defining companies,” capturing where technology is headed next. “Founders who can stay ahead of the curve, build to the edge of what’s possible today, and build for what’s to come,” she enumerated. “Founders who are able to really read the market and understand what their customer wants rather than just building what’s possible. Those are the founders who will have an advantage.”
Elsewhere on the pod, she spoke about her life before venturing out, where she worked at YouTube and 21st Century Fox.
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“A lot of what I did was meet people who had great technology,” she recalls of her time at 21st Century Fox. Meeting and talking technology with people was the part of the job that brought her the most joy and helped her realize how much she would likely enjoy working with startup founders.
But the learning curve was steep when she decided to move into investing. At first, she said she would constantly check in with the founders and give detailed information about their business.
“That’s appropriate in some cases, but it’s really about the relationship with the founder, not just weighing in on the company, but supporting them as a person,” she said.
She is now comfortable in her work. She serves as a mentor for various organizations, such as Techstars, and has made more than 50 investments at January Ventures, according to PitchBook, landing a few exits in the meantime.
Throughout the conversation, Neundorfer talked about the evolving venture capital market, funding levels for minorities and women, and which venture capital markets outside of San Francisco are seeing success. His biggest advice to diverse founders right now is for many founders building in this climate: ignore the noise and focus on building a good company.
“Everything else becomes something they can’t control, and the worry isn’t worth it.”
