As investors scramble to find the next big AI startup to fund, one VC firm got rid of its analysts and is instead using AI to help run deals.
Four-year-old Davidovs Venture Collective (DVC) — cofounded by married duo and general partners Marina Davidova and Nick Davidov — has launched a $75 million fund for Series A and B AI startups.
They say they fired their analysts, who typically help source and vet deals. Instead, DVC is tapping a network of 170 limited partners (LPs) — including founders and engineers from OpenAI, Google, Meta, Microsoft, Tesla, SpaceX, and Perplexity — to source new deals, and it’s arming them with AI tools.
DVC initially employed five part-time and full-time analysts, Davidova said, and it eliminated those roles more than a year ago in lieu of AI.
DVC’s network of LPs now use AI agents to assist with deal memos, due diligence, and portfolio monitoring. The agents, which the LPs also helped build, can also identify founder needs and match them with relevant experts in the community.
The LPs will assist founders with hiring, sales, product development, and networking — in exchange for carried interest, a share of profits earned by investment managers. Davidov said that roughly 30% to 40% of the carried interest from each deal is shared with the community of investors, 30% to 40% goes to the partners, and the rest is divided between him and Davidova.
“We have really incredible talent that we would never be able to hire,” Davidov said. “They’re the kind of people that Zuckerberg offers a hundred million dollars to, and they work for us for free on their weekends.”
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While AI has made the firm more productive, it can’t replace humans when it comes to assessing qualities like a founder’s mental state, Davidova said. Other VC firms are also using AI to replace associates, and Point72 Ventures managing partner Sri Chandrasekar predicted that AI can reduce head count by over 50%, Business Insider previously reported.
The couple launched San Francisco-based DVC in 2021 with a network of 50 LPs.
Its seed fund has invested $21 million to date in 120 companies, including Perplexity, Etched, Thinking Machines Lab, and Higgsfield.
LPs backing DVC’s new fund include TechCrunch founder Michael Arrington, Perplexity cofounder Denis Yarats, Zencoder founder Andrew Filev, and Semrush founder Oleg Shchegolev.
Along with launching the $75 million fund, DVC has onboarded two general partners — entrepreneurs Mel Guymon and Charles Ferguson — and named Meta AI product manager Alexey Rybak as a venture partner. Guymon will spearhead business sales support and governance, while Ferguson will focus on deal origination.
The new fund has secured $40 million and is finalizing the remaining amount with institutional investors, DVC said.
