Ash Fontana is Managing Director at Zetta Venture Partners, an early-stage VC firm focused on AI-first startups.
Opinion
Fontana: Programmatic sourcing of early-stage startups is a fool's errand
“The programmatic analysis of early stage companies, I think, is a fool's errand, and I have seen some of the best data in the world of AngelList. I've talked to all sorts of people experimenting with that data when I was there and since then, and it doesn't re…”
Insight
Fontana: AI-First Startups Build Compounding Advantages Unlike Traditional SaaS
“In SaaS, you're competing on features and integrations, and they're easy to copy, and it's just a rat race. And in AI-first companies, you can get this runaway advantage very quickly because the system compounds in value itself, like without it, without any ef…”
Assertion Not checkable as stated
Fontana: AI startups achieve 95% to 98% long-term gross margins
“You tend to start at 40 or 50% gross margin, but then you get to 95, 98%, we're seeing in some companies we work for gross margin, and then you just stay there. As opposed to SaaS companies, we're constantly having to build another feature or deliver a service…”
Assertion Partly supported
Fontana: European AI startups receive 10% of the funding given to US peers
“There's more research papers, AI research papers that is coming out of Europe than anywhere else, but European AI entrepreneurs get one-tenth funding of US entrepreneurs.”
Insight
Fontana: Legacy Software Incumbents Cannot Easily Build Consequential AI Models
“If you're a company that's not an AI first company that started sort of before this AI era, you can't really build any predictive models of consequence because you don't have any of that customer data and you have to sort of go back to your customers, renegoti…”
Disclosure
Zetta evaluates data moats across accessibility, fungibility, dimensionality, breadth, and perishability
“Data moats are indeed real, and we evaluate those data moats very carefully at the diligence stage, and we look at things like accessibility, fungibility, dimensionality, breadth, and perishability.”