What We ♥ About the AI Fund

At Else Ventures, we're constantly inspired by innovative models within the startup ecosystem. One that particularly resonates with us is AI Fund, a venture studio founded by AI pioneer Andrew Ng. Their approach to building companies from the ground up, particularly in the AI space, holds valuable lessons for any venture studio.

What sets AI Fund apart is their commitment to acting as a "minor co-founder" rather than just an investor. This hands-on approach, deeply embedded in each startup they support, mirrors our own "Left of Launch" philosophy. AI Fund goes beyond traditional capital investment by providing a comprehensive support system that encompasses market validation, technical expertise, business support, and even team building through their extensive AI network.

We're particularly impressed by their multi-phase "powered by AI" process for building seed stage AI companies. It begins with validation of AI-first ideas against real-world challenges and use cases, followed by actively recruiting CEOs to lead newly formed ventures, and then finally, seed stage capital injection and growth.

How they did it with Bearing.ai

This story began not with a founder pitching an idea, but with Japanese shipping giant Mitsui approaching AI Fund with a challenge: could AI make their ships more fuel-efficient? AI Fund, embracing their collaborative model, spent a month rigorously validating Mitsui's concept, ensuring both technical viability and market demand. Then, in a move characteristic of their process, they recruited Dylan Keil, a seasoned entrepreneur, to become Bearing.ai's CEO prior to significant development and seed investment, emphasizing their commitment to establishing strong leadership from the outset. Over the next few months, AI Fund worked hand-in-hand with Keil, leveraging their AI expertise to rapidly prototype and further validate the solution with customers. This tight collaboration between the studio, the corporation's initial concept, and the recruited CEO resulted in a successful product launch. Hundreds of ships now use Bearing.ai's AI, saving fuel and emissions. This success story underscores how AI Fund's model effectively tackles industry-specific problems with the agility of a startup, by leveraging a potent combination of corporate resources, a studio's expertise in AI, and carefully chosen leadership. (See talk here, starts at 25:12).

https://youtu.be/5p248yoa3oE?si=PLf2pKie9LvxYxf8&t=1510

Using the approach

We see that AI Fund's collaborative model illustrates another pathway for venture studios to make an impact early with key contributions months prior to teams are founded and first checks are cut. By working closely with corporations, they identify practical applications for AI within existing industries, bridge the gap between technology and implementation, and ultimately, assemble the right leadership to bring these solutions to market.

At Else Ventures, while we focus on a broader range of technologies, we recognize the increasingly central role AI will play in all startups. Their success in nurturing groundbreaking AI startups provides valuable insights as we strive