Ash Fontana (@ashfontana), General Partner at Zetta, and Leo Polovets (@lpolovets), General Partner at Susa Ventures, join Erik on this episode. They Discuss:- What does the future of venture capital look like?- Which firms are leading venture capital and who will be the top venture firms 10 years from now?- Being a generalist investor versus a specialist- Portfolio structure and the role of follow-on funding as part of a firm's strategy- Is it important to have one portfolio company that can return the entire fund?- Are there moats in venture capital?- The role of pricing power in venture capital- How is venture similar and different to company building?- Compounding Data Moats- Request for StartupsThanks for listening — if you like what you hear, please review us on your favorite podcast platform.Check us out on the web at villageglobal.vc or get in touch with us on Twitter @villageglobal.Venture Stories is brought to you by Village Global, and is hosted by co-founder and partner, Erik Torenberg.
Ash Fontana is a Managing Director @ Zetta Venture Partners, the fund that invests in AI-first companies with B2B business models. As for Ash, prior to Zetta he started the money side of AngelList, where, he launched online investing, created the first startup ‘index fund’. He also ran special projects like AngelList’s expansion into Europe and the UK. Simultaneously, Ash led syndicates and made investments in Canva, Mixmax and others. Before AngelList, Ash co-founded Topguest, a Founders Fund-backed company that built customer analytics technology and was ultimately sold in an 8 figure transaction 18 months after the company was founded. In Today’s Episode You Will Learn: 1.) How Ash made his way into the world of venture with AngelList and how that led to his joining Zetta today, investing exclusively in AI? What did Ash's time working on his family farm teach him about vertically integrated businesses? What were his biggest takeaways from AngelList and working alongside Naval? 2.) What does AI-first really mean to Ash? How crucial is it for companies to have proprietary datasets today? Are data moats truly defensible and real? What are the 5 characteristics that determine the level of defensibility of a dataset? How does Ash analyse the quality of a dataset? What does Ash do to determine if they are predictive of value? 3.) We often hear the term, "system of record", why is Ash so much more excited by the "system of intelligence"? Why is the basis of competitive advantage shifting from SaaS today as a model? How do the margin structure vastly differ when comparing AI-first companies to SaaS companies? How does that mean one should view capital efficiency? 4.) What does Ash believe drives business model quality? What are the commonalities in the business models of those that have made it big? Why does Ash believe it is difficult for incumbent companies to become AI-first? How difficult is it for incumbents to acquire smaller AI-first firms and integrate their policies and technology? 5.) Why does Ash love Howard marks and what has been his biggest learnings from studying him? How has Ash applied these learnings to his investing today? What has Ash also learned from the Italian masters of design? How has this study helped Ash as a VC? What has Ash optimised lately? What is Ash's favourite optimisation? Items Mentioned In Today’s Show: Ash’s Fave Book: The Strategy of Life: Teleology and Mechanics in Nineteenth-Century German Biology As always you can follow Harry, The Twenty Minute VC and Ash on Twitter here!
My guest on today’s First Meeting is Ash Fontana, a Managing Director at Zetta Ventures, a venture capital firm that backs Artificial Intelligence companies with B2B business models. The firm invests in early-stage companies with unique data sets and models, and rolls up their sleeves to help founders by using a playbook Zetta created specifically for AI companies. Ash started his career as an entrepreneur and investor, and before joining Zetta started and built the money side of AngelList alongside Naval Ravikant. Our conversation covers Ash’s background, Zetta’s thesis, team, and strategy, and turns to Zetta’s sourcing, due diligence, decision making, portfolio construction, working for portfolio companies, and investment examples. Along the way, we cover the evolution of AI, assessing data sets, misperceptions about AI, competing with the tech giants, and the future of investing in the space. Learn More Read the Transcript Subscribe to the Capital Allocators Blog or Monthly Mailing List Don't Subscribe, but Let Us Know Who You Are Write a review on iTunes Follow Ted on twitter at @tseides Review past episodes of the Podcast
My guest this week is Ash Fontana, a managing partner at venture capital firm Zetta, who invests in companies which build software that uses artificial intelligence methods like machine learning to predict and prescribe outcomes. Ash’s combined experience as a founder, entrepreneur, and investor give him the perfect background to discuss with us one of the hottest topics in business and investing. This conversation is useful for anyone trying to evolve their own way of dealing with data. Of particular interest are the ways that Ash and his team evaluate data sets and how they think about competitive advantage in this new world—where he advocates a new term to replace the concept of moat: loops. If we can use data to do things better than humans, or if we can supercharge our intuitions with predictive models, we can harness the power of this new technology. What Ash has taught me is that data itself is dumb. But great data sets can represent the fuel for incredible companies. Let’s dive into how that may be. Please enjoy this conversation on how AI is changing business, and how we might profit from that change. For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag Books Referenced The Most Important Thing: Uncommon Sense for The Thoughtful Investor Links Referenced Jerry Neumann Podcast Episode Ali Hamed Podcast Episode Show Notes 2:25 - (First Question) – A look at their very specific investment strategy 3:35 – Future of competitive advantage in the SaaS industry 6:45 – How startups and new companies can compete against software giants that are pretty well entrenched in the market 8:38 – How do copies with narrow focuses attract VC money which is looking for massive returns 12:28 – The stages in which AI will be enabled 15:55 – Framework of an AI company 18:49 – Importance of the feedback in the AI company framework 20:56 – Examples of AI companies 23:50 – Why companies that are AI from the start will have a significant advantage in the space 26:21 – How do companies change their thinking about compiling useful data 32:18 – Regulation of AI 35:03 – Preventing other companies from leap frogging you in the AI space 37:57 – Some of his favorite AI companies 40:43 – How much has he seen in the finance world 41:07 – Jerry Neumann Podcast Episode 43:10 – Why the focus on B2B AI companies 45:34 – Major components of the enterprise stack that he focuses on for AI 49:30 – What impact will all of this AI have the daily lives of people 51:38 – Biggest problems that he is excited to see AI tacklet 53:04 – How do you value the intangible asset of an AI model 57:13 – How Ash thinks about getting other investors into firms they seeded 1::00:27 – Other investors that Ash really respects 1:01:15 – The Most Important Thing: Uncommon Sense for The Thoughtful Investor 1:03:29 – Ali Hamed Podcast Episode 1:04:04 – Where would Ash invest outside of AI 1:07:11 – More about his family nut business 1:11:18 – Favorite macadamia nut story 1:12:05 – Kindest thing anyone has done for Ash Learn More For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag