GenAI Race – Picking the winnners – Jim Pulcrano
Leveraging networks for quality deal flow
Sanghi stresses the importance of referrals and vetted deal flow in identifying such promising AI startups, underscoring WillowTree’s collaborative approach to investment. “Every single investment we make, and every entrepreneur that comes to us is a referral through our network,” he says. “That provides us with an edge in terms of access, and what we’re getting is already vetted. So, we’re getting a high-quality deal flow.”
Notably, WillowTree positions itself as a symbiotic investor, only co-investing and not leading funding rounds in AI ventures. “We are not competing against existing VCs; we only add value to them,” Sanghi stresses.
Unlike his previous role as Founder and Managing Partner at American Express Ventures, where Sanghi focused on later-stage companies with established product-market fit, WillowTree targets entrepreneurs at the concept stage, leveraging their potential and vision.
Sanghi calls it his “superpower” to recognize and empower the strengths of startup founders. “We’re investing in the entrepreneur. There’s typically no revenue. There’s not even a team. There’s a founder, but a very experienced founder at that, who is very credible, who has a very good thesis and approach to their product.”
One such example is Curie, a startup that builds GenAI products to enhance the productivity of enterprise IT teams, founded by AI experts from big-name corporations like Meta, Amazon, and Uber.
Sanghi says, “When you look at enterprises, they all have a lot of legacy code that they need to continuously integrate as they upgrade new versions of software. Curie is a co-pilot for engineers to automate the integration. You could not do that before you had GenAI.”
In essence, the rush of venture capital into such startups reflects the immense potential of AI-driven innovation and the need for discernment in investment decisions. WillowTree, with its enterprise focus, practitioner network, and collaborative ethos, offers a framework to separate the wheat from the chaff.
