As a leader of a private company, there’s a good chance that you’re constantly thinking ahead.
How will I reach my next revenue goal? What’s the next product innovation on our roadmap? When is my next fundraising milestone?
One topic occupying the minds of many forward-thinking company leaders is artificial intelligence. And for good reason; AI technology could change how we do business, and how investors view the private markets.
Global private investment in AI is forecasted to rise from $91.9 billion in 2022 to over $158 billion by 2025, according to a report from Goldman Sachs. That’s a 72% increase in just three years.
Our new report, Boston Startups Put AI and Data to Work, helps private company founders and leaders make sense of AI’s emergence.
Brought to you by Fidelity, Glasswing Ventures, and the New England Venture Capital Association, the report focuses on the impact of AI and data on shaping vertical industries and enterprises. Don’t worry if you’re not based in Boston; the insights reflect general trends that could benefit any private company leader.
Our previous post explored three AI trends that are affecting the macro environment of startups, investors, and software. These tips will focus on helping you turn insights into actions that could help position your company for the future.
3 considerations for private company leaders to navigate the AI landscape
Consider viewing these through a couple of different lenses:
- How you can use AI technology to help your private company achieve its growth goals; and
- How AI-related trends could inform your approach to fundraising, investor relations, and overall company building.
Seek out specialized AI products for your industry.
Generative AI, or AI used to help generate new content/code/simulations, etc., is a segment of the AI market receiving notable attention. Spending on Generative AI (GenAI) is projected to increase 10-fold by 2027.
But we may have only seen the tip of the GenAI iceberg, according to Rudina Seseri, founder and partner at Glasswing Ventures and author of a popular newsletter on AI & ML. In the report, Seseri predicts that GenAI software will transition from personal productivity tools to more specialized use cases.
Per Seseri, the greatest opportunities come from startups that leverage deep learning and other AI techniques to, “solve fundamental problems that generative AI and run-of-the-mill SaaS can no longer, or never could, solve.”
These fundamental problems include industry-specific applications, such as improved customer service, better customer targeting, and more comprehensive regulatory compliance.
Be on the lookout for AI tools that are tailor-made for your specific industry or stage. They might help you differentiate from competitors.
Consider AI usage in the context of your own goals.
Kristen Craft, VP, Business Partner Manager at Fidelity, brought forth an interesting perspective in the report.
“AI isn’t the point of the company (being funded),” Craft said. “It’s what supercharges the company.”
In other words, private company leaders could look at how to purposely use AI to be more effective, rather than implementing AI tools just for the sake of it. Simply using AI tools isn’t enough anymore, Craft suggests.
She mentions viewing AI as a means of achieving lower costs, driving innovation, and producing novel methods to reach strategic objectives.
“That could mean using intelligent technologies to better target customer communications and personalize experiences or to more quickly convert prospects into customers,” Craft said.
Stay focused on the fundamentals.
Naturally, founders might be wondering how their company can stand out in this fast-changing environment. With an increase in new AI technologies, how can you capture the attention of investors?
According to Craft and Seseri, it comes back to the fundamentals. Craft mentions prioritizing solid revenue metrics over lofty projections.
Seseri notes she’s focused on “teams with grit and resilience, who can make dollars last.”
Best practices such as keeping a clean cap table and maintaining fundraising documents might help remove some friction from the fundraising process.
Stay fundraising-ready with Fidelity Private Shares.
Private company leaders looking for more insights on AI fundraising and the future of GenAI can download our free report.
If fundraising and equity management are top of mind, consider checking out Fidelity’s equity management platform, Fidelity Private Shares. Our software can help automate the organization of your company’s crucial documents and data, so you can be fundraising-ready as you grow your company.
Chat with our team to streamline your fundraising, equity management, and more with Fidelity.
Fidelity Private Shares LLC provides cap table management and other administrative services to private companies and their equity compensation plans.
The statements and opinions expressed in this article are those of the author. Fidelity cannot guarantee the accuracy or completeness of any statements or data.
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