AI-First Venture Capital: How InReach Finds Europe’s Best Founders Early (Roberto Bonanzinga)

If you think about the value chain of venture capital from sourcing to exit, you can apply technology and machine learning and AI, to use terminology of today, across all the different steps. No doubts about that. And I have millions of ideas of things that I can do. The point is, however, that you need to stay focused.

Welcome to another episode of the Venture Capital Podcast with your host, Peter Harris, me and John Bradshaw. We are super excited for our guest today, Roberto Bonazinga, who is a veteran venture capitalist and one of the earliest architects of the of Europe's VC ecosystem. He's the founder of inreach Ventures, an AI first venture fund that uses its own internally built AI model to discover and identify the best entrepreneurial talent across Europe. In this episode, we're going to talk about how AI is changing venture capital itself and what it means to invest in people before ideas and how Roberto thinks about building the next generation of iconic companies in Europe. Thanks for joining us, Roberto. Welcome.

Thank you.

If you're willing, I think it would be great to maybe start the conversation off with just learning a little bit more about what you're doing at inreach. And I'd love to hear, and I think our audience would love to hear kind of the, the, the story of, you know, how you came up with the idea of inreach and decided like this was going, going to be the future of VC and started building the firm.

Yeah, look, it's the result of experiences, right? When I was a Boldon, I realized that I had a passion and my passion was to invest very early stage. When I say very early stage, I mean fundamentally pre product market fit. And you know, I was very lucky to have the opportunity to work with some pretty amazing entrepreneurs like the founders of Depop. Then we sold to Etsy for 1.6 billion. The founders of Contentful, they built a multibillion dollar company. The founders of Vivino, the founders of Vooga, the thing all these companies had in common. When I invested, there were two, three, four, five people. And the biggest issue with that type of investment strategy in Europe is to know that the company exists. Because you see, although, you know, of course there is some geographic fragmentation also in the United States, in Europe, the geographic fragmentation is huge. You know, the next Spotify or the next Depop or the next Contentful can start in Milan or in Lisbon or in Berlin or in Copenhagen. You never know. So if you really want to invest at that stage, there is a big problem, that is discovery. And then I started having the idea there might be a better way for Discovery than just traveling like crazy every two, three days in a different European city. And around that idea we started in reach with the exact name to be in reach of entrepreneurs independently from where they are. And the whole concept around Inreach Vida is basically, you know, using data and AI as a way to find the next Spotify before anybody know that they exist.

I love it. And so you've spent quite a bit of time building out that AI model to help you accomplish that. Can you tell us a little bit about more about that whole process and what it looks like?

First of all, I love you use of the past because it makes me to believe that it's done or finished. What is not a big project, it's.

A never ending project.

I'm sure it's one of those I would call a life project. Probably not only my life, but life for my partners and a new partners who will join. I want to say it's never ending, but I can tell you that the beginning was pretty grim because I was spending, you know, we started a firm in three of us and I spent honestly the first 18 months in a room training machine learning algorithms about what I like, what I don't like it, why I like it, why I don't like it. And it was really not a very cool experience. You know, I used to travel around, go to nice hotels, having nice dinners. No, I was lonely in front of my computer with my partners. Oh, I like this for this reason. And fundamentally now, despite the joke, labeling data. Right. That's how the whole, the whole concept started was let's build a data platform, let's start labeling data. Tens of thousands of actions of clicks that today obviously are hundreds of thousands and then they became millions. But at the beginning was just a lot of clicking. That is not very cool, I can tell you.

But you know, you look at some of the the companies with the most revenue today and it's all labeling data. It's just such a valuable part of AI model development. And I'm sure like that has got to be a huge part of the secret sauce of your model is that it's built on a lot of your expertise evaluating founders at the earliest stages.

Yeah, it's for sure the fundamental concept around what we call the intelligence layer that fundamentally is a set of machine learning algorithms. Yes. That we have been training based on experience and try to replicate the way how the brain of an investor think.

Yeah. I'm curious, what was it like in those early meetings with LPs when you went set out to raise the fund and kind of the pitch was, we're going to use this AI model to help us find and make investment decisions.

I think I look at it, I can tell you as attributes. I remember it was not just LPs but also my colleagues in the industry. Everybody thought I was completely crazy. It's impossible because everybody was basically fundamentally thinking machine learning algorithms need a lot of data, therefore early stage venture. And a lot of data is a contradiction in terms. It will never work. It's impossible to do. Interesting, but not to my LPs. But I will tell you, my best friends, that was the tough thing. And they tell you, you're crazy. This is never going to work.

It's like, okay, we started this project 10 years ago, right? 10 years. That's before AI was cool.

Yeah, when the intelligence layer was called the machine learning algorithms. And in all honesty guys, when I started, I started with a concept of data and my idea was, okay, let's build a firm where we uniquely create a new type of data platform, optimize for the investment strategy, for the discovery of minimum valuable products. Because at the end that's where we invest. We invest in a stage in which an entrepreneur built an mvp. So Digg, by the way, is the name of this platform. We call it Diggs. One day I will tell you the secret about this name. But you know the reason why we started creating Dig? Because we thought, okay, entrepreneurs leave footprints on the Internet. Let's be fundamentally connected those footprints, that was the original concept. So when started the firm, I had very clear idea about the data platform. And then it's after we start working on it, we said, okay, wow, we have so much data here. Better we build and an intelligence layer using machine learning. That's how really those things started.

Can you tell us how it's worked so far? Has it helped you uncover startups that you wouldn't have found before and kind of walk us through what that experience was like?

First of all, I tended to be a serious person. So how it's working, I'm honest with you, is still working in progress. Because although people in venture sometimes have different views about what work, what to work means, in my books something works means you're returning capital in several multiples so that the ULP can make money. Obviously we invest pre product market fit. So from the moment in which we invested to a time of an exit is going to take some time. So I'm not here to tell you, hey, look, I return so much capital out of this set of algorithms, this approach, because we are not there yet. But what I can tell you that is I definitely feel that the work in progress is extremely promising. And one thing that I can tell you as a number is 75% of all the deal that we have done at Enrich, they have been sourced through this method. 75% is a lot.

That is a lot.

And you must think about a period that I've been in this industry for 20 years. Yeah, 25. So when I say, you know, I know a lot of people. Amanda, my partner. Amanda, has been in this industry for, you know, 18 years. Ben has been in this industry for something like that. John, the same. So what I'm trying to say is that our network of connection is pretty, pretty dense. And it's not like if somebody comes via my network, I tell them, hey, look, I don't look at this deal because I'm in the business of making money, right? I'm not in the business of creating algorithms, right? So what I'm trying to tell you, although this network, although this level of knowledge, this level of insights in the, in the ecosystem, 75% of our deals are being sourced using this system. For me, it's pretty astonishing.

Yeah. Yeah, that's amazing.

Way more than I expected when I started the firm for clarity.

Huh. Interesting. How much does the. Does the model dig help you and me in terms of making investment decisions? Because I'm sure, like, to some degree it's helping you identify interesting founders early on. Does it go beyond that or is it mostly just that kind of that first step of saying, hey, this founder and this company might be interesting.

When we thought about the start of inreach. If you wish the framework around our roadmap. I know it's strange to talk about a product roadmap in a venture firm, but actually that's how we started the firm. We didn't start the firm by doing a fund. We started the firm by started building software. Defining a product roadmap. Our view and our idea is, is that if you think about the value chain of venture capital from, you know, sourcing to exit, you can apply technology and machine learning and AI, to use terminology of today, across all the different steps. No doubts about that. And I have millions of ideas of things that I can do. The point is, however, that you need to stay focused. You know, I'm sure that you people do the same as I invest, right? I spend my time. If I tell you what is the most frequent suggestion I try to give to entrepreneurs is don't overscale. What is not Ready to scale, stay focused. So for me to be, to say that then behave in a different way, that would be different. So although the strategic understanding of what we can do with technology is very broad today, the vast majority, I want to say 90% of our efforts has been focused on what we call discovery. If you want to use a more financial, you know, terminology, you know, you can say origination because the fundamentally Peter, that is the starting point from everything, especially for a very early stage investor. I always think you can make good investment and bad investments. And that is something probably if you are a good investor over time you also learn how to do good investments. But there is one part of the strategy that is fundamental is the deals that you see the deal say you have a possibility to make an investment because if you don't see the deal, you don't have the option to invest. So the whole concept around Digg Enrich we are based in London, we are four gps, three four software engineers and the whole focus is we want to see everything and we want to be able to see the companies that is the next Depop, the next Spotify, the next Revolut and X UI part at the right time. That is the key is the right time for that type of investment strategy. And to be honest, we'll be super narrowly focused on this. I would say I'm a bit of a painful, a very pain to everybody every single time, you know, we try to go in other directions because I really believe this is the core to our business.

Yeah, no, absolutely. John and I were just talking about how the importance of focus and how it really is one of those factors that determines who wins. It's not the idea, it's like your ability to just grind on that idea long enough to make it successful. It's interesting. I was listening to a conversation with Bord VC which is how we got connected through LinkedIn through. I posted about Bordy and one of the things that he, the CEO of Bordy mentioned as well as.

Oh, I thought you were the.

Thank you also mentioned this on the call was this idea that because they were, they were leveraging AI, they were able to reach founders that were maybe under, underappreciated, underserved, you know, less likely to get funding from traditional sources because they didn't have the networks. And I'm curious, are you seeing something similar with your model where you're able to identify pockets of entrepreneurs that you know, maybe you wouldn't have seen before?

Look, I think yes and not in the meaning that again, going back to the fragmentation of Europe, obviously. Dig. Allow us to see things in geographies that otherwise they are not normal to go there. Right. So one other investment is a company called Eneba that is a marketplace for gamers. These guys are based in Lithuania, right. In a city called Kunas. I actually didn't even know the name of the city before I discovered the investment opportunity. Right. So there is a part that you level up of a beauty around the fact that you feel that you're living up the European world of tech entrepreneurship. Right. Everybody now has got the same chance independently if they live in the middle of Sicily or downtown London. Okay. So that it's one dimension that for sure is cool. But to be honest with you, when we actually analyze the investments we have done at inreach, we have also a lot of investments in our downtown London of a similar also very successful returning entrepreneurs. Because I go back to the point of the timing. We usually proactively contact these entrepreneurs at a time in which they are building mvp. They just don't even want to talk to investors. And we just knock at their door and we say, hey, look, we actually think what you're doing. It's interesting. Do you mind that we have a 20 minutes call? They say, the first question they ask is how do you know we exist at the same. Then once we say, look, that's what we do. We actually, you know, because we built this platform, they say, but I don't have a PowerPoint presentation. And we say that's great because we don't use PowerPoint presentation and we don't believe in pitching.

Yeah.

And from there then we engage.

Yeah, that's great. What do you believe in? So if you don't, if you don't believe in pitching, like how do you, how do you work with entrepreneurs and what's your preferred way of hearing their vision?

I like them to tell me what you know and I. There is always this tension because obviously, you know, why combined or everybody, you know, teach them to pitch, pitch, pitch slides, slide slides, you know, 10 minutes, five minutes. You know, I just like to hear the way how they articulate things and also try to figure out why they articulated things like that. And it's incredible the moment in which you remove the slide. Some people, they just start panicking right and left because they're just not so they come true. That is what you want as an investor. You don't want a presentation. You want to really try to understand what is the insights that team has got on the type of problem they're trying to solve and why. And I just love that. I love that it's almost as to do a podcast, right? You try to get into it and that's what makes to me special. That's why I love by the way, what I do.

Yeah, no, I love it. My favorite question to ask founders is always something very similar. I'm just like pitch deck, whatever. But what I want to hear is tell me your origin story. Like how did you come up with this idea? Why? What got you motivated? Why are you excited about this? Where did you see the prop? Like just walk me through it. Like those are my. Some of my favorite conversations I always.

Start is always mine. You know, I call it what's the genesis of the idea?

Yeah, yeah, exactly.

And they look at me, what do you mean? I say, you know, why? How did you come up with it? And the second thing you know, I really love is when they start talking about the team, they start telling you what if for example is two, three co founders. They immediately try to tell you what they have done. And I tell them actually, you know, I can see that on LinkedIn. I don't need you to tell me what you have done. What I'm interested is how did you meet? Why did you think that this guy was the right co founder for you? Those are the type of information that obviously by definition in a slide deck, they don't come through.

Yeah, yeah. So I have a question because I. I want to kind of pull this back into the AI side. Do you think that AI can get to a place where it disrupts vc or do you think that like the conversations that we're talking about right now become, you know, there's something human about it that. That will be challenging for AI to fully displace?

No, but I think so look, I start in reach on the premises that AI will change the way venture capital works. And I am a big believer of that now the question is what does it mean to change? What is the role? What does it mean to be an AI first venture firm? And the reality is that that question. It depends. It depends on different stages. There is not an answer if it at all. I can't tell you exactly what does it mean for early stage, but has got a completely different approach for later stage. It means something completely different for private equity. It means something completely different. So there is not a way to do it. It depends fundamentally on a very basic concept. What is the type of problem that you're trying to. Look, we. Look, we for people in London have A view something like 70% of all the European deals for our stage. This will not be possible without AI. It's just unpractical. You will need to have 70 people around in different European cities randomly trying to meet entrepreneurs to be able to have the same level of visibility that we have. So for sure AI will change. They will change. I believe there will be a group of venture firms that will be AI first which I would like you to believe that we are one of the pioneers in the world.

Do you think? You know, I've thought a lot about this and I've wondered do venture funds just like all businesses frankly I think is one way to look at this is like do they just become smaller in terms of the number of people and it's you know, one, two gps and a whole bunch of AI agents that support them and they now do what used to be a 10 person firm and like that becomes the evolution of venture. Or do you believe that it might look different? I'd be curious to hear your perspective.

I do think we are going to see different type of venture firms. I do believe that, you know, we will see a first billion dollar investment firm with the two, three people.

Yeah.

And there will be a lot of agents and that idea is going to work. You know the point that I'm trying to. I think that is very true for any business Peter is we need to put this in the context of what I would like to call the strategic sync of different aspects that has to do with the investment strategy, the portfolio construction, the way how you use the technology and the organizational design. These four things take different type of shapes. So for example, I can tell you in the early stage the type of problem we're trying to solve. My biggest, if you wish inspiration for inreach has been benchmark. I know the guys very well since the beginning. Bold used to be Benchmark Europe. It's a model that I loved. What I always loved of Benchmark were a couple of very important things. One was fundamentally the GP only firm. Then I went there trying to hire hundreds, hundreds of tens of associates, principals. There was not of that. And what I always like it where they fundamentally stick for a long time to the same strategy. They didn't go through different waves. We say we invested this Benchmark could have. They want to do an $8 billion fund. They could do $8 billion fund. Right. It's a choice. So what I've been inspired through that concept and that's around the idea around that we built in Rich. What does it mean? Look, we're trying to solve a problem at this early stage. Early stage in Europe implies a certain type of fund construction and a certain type of fund size. So in Europe for this type of investment strategy, the fund size will be always between 50, 70 million. That is the range. It will never be 500 million. It will always be with a certain type of number of investments in a fund, a sensor type of ownership and AI to solve a very specific problem. And the problem that we solve is the problem of fundamentally of discovery. So the result of that is. You're very right. For example, I think Rich, it's GP only won't be. We have been recently built agents fundamentally substitute the jobs of analyst, associates, principals. And that is in our investment strategy the way how this thing is going to work. So yes, in our investment strategy there will be no space for a lot of different type of people. Now I can see that also some later stage funds might take this approach and decide that they will use analysts that will be AI agents. They won't be any more individuals, they won't have associates. They will try to do that type of investment strategy also with a larger ticket size.

Yeah.

I do think however that there will still be service companies like, you know what I mean with that is a venture firm so that we believe they add value by hiring recruiters and you know, branding people and marketing people in their paychecks. So I don't believe there will be a fit or one strategy for everybody. But I do believe that we are in front of a very unique opportunity. There is the opportunity, thanks to AI to create a new type of venture firm. It doesn't mean all the venture firm must be that a new type. But I am very excited by this new type. And in this new type it's, you know, one thing that excites me the most is that actually will be GP only. That is something for me very interesting. You know why? Because I think entrepreneurs deserve that. You speak to decision makers.

Yeah, so many. So Benchmark's model really worked because they would take people who cut their teeth at other funds, got that training as the analyst, associate, principal, developed a track record and then Benchmark would bring them in to be a partner and run and so they could kind of leverage other firms to do a lot of that, that, that talent development. My question is if we move to a world where these are only GP oriented funds, because I think you're right, that is, that is the move. Do we, is that a short term solution? Because we're not training like the next Class of gps. Like if I'm, if I'm brand new, how am I going to get the experience to be an investor? Because I don't know about you, but I, I firmly believe that just being a founder does not therefore make you a good investor. I think there is a certain amount of like it, it's kind of a craft, you know, it's, it's building your gut or whatever it is. But, but there's a lot of like skills and abilities that are kind of learned by doing in the space. And so like, and I think this is applicable not just in venture but like across the board where I work with students all the time. And I worry a little bit that like the, the analyst class is going away, it's being replaced by AI agents. And I worry like well, how are, how are my graduating students going to get the experience they need to eventually one day be the GPs or be the VPs or the managing directors or the CEOs of of kind of whatever industry they're pursuing.

So look, this is probably one of the deepest point of which challenge and opportunity that I think we will face. And that's nothing to do with only venture capital that can be applied, as you rightly said, to each single job in each single industry. And by the way, I think we are fairly fortunate to have the opportunity to live through this because I think the world is going to be different in the future. I don't know which world is going to be different, but I have an optimistic outlook. Otherwise I would not do what I'm doing. So I want to believe it would be a better world would never be on that I agree with my friend Rudy Doffman. I think I a little bit first of all disagree with you Peter, in the meaning that I don't believe actually the be a venture capitalist, a gp, it's a craft.

Okay.

Okay. Really? Yeah. I believe that you need a set of skill set. But I think that the skill set can be found and created and learned with different type of jobs. In fact, you know, personally again look at this different way. I'm not trying to say you're wrong. I just think have a different opinion. You know that I, the GPS I love the most people come with an operational background. And by the way also benchmark Matt came from LinkedIn and Facebook, right. So he was never an industry before. So I am very passionate. By the way, I think Rich, we are all operators. That is very unusual by the way, because in Europe actually the majority of the GP come with a background in finance. And consulting.

Yeah.

So I actually believe that in order to be a good GP, you need to have the skills, but you can get those skills in different ways. Then we should talk about what are the best skills, how do you get them? What I'm trying to say, however, if we generalize this point, is that we need to start thinking a different way. This has a tremendous impact across all the different jobs. A better way, education. The point is not, I don't think there will be any more of this thing of I do something as a junior so that I learn, then I become the senior. This thing is not going to work anymore, guys, because they won't be. The junior jobs disappear, by the way. Look, my first job, I took a pile of paper like this, I loaded inside the system, I created a database. It was one of the most boring jobs I had in my life. You know, it's true that I probably am here thanks to that job and I created this fantastic database, but I spent day and nights entering those data inside the computer. Look, I'm very happy that the new generation don't need to waste their time to do that. So that's something we need to. I think the key is we need to start thinking that in order to do a job very well, you need to acquire skills. The skills you need to acquire. It doesn't mean you need to do that job in a junior way. It means you need to do different things that allow you to acquire those skills.

Yeah.

The reason why I love so much operators as a VCs is because they have acquired some skills that are very helpful and very useful to be a very good gp. Now of course that is not enough because the skills you need to have, they must be broad. So, you know, if you are a fantastic product person, it doesn't make you automatically a good gp, but for sure allows you to have a very strong level of empathy when you speak to a product led founder and you try to understand what he's trying to do. So I think we need to stop thinking about this concept of crafting and you know, learning as a junior. So we need to start thinking about how do we acquire that, the skills that are needed to do that job.

Yeah.

And I think education need to do this, need to start thinking. Okay, but you know, if I want to be a vc, what is the path that I need to follow so that I can learn those skills?

Yeah. So what advice would you give to somebody who's young, bright, motivated? What are those skills?

So I can tell you on this. I have been Very consistent. Even before AI, even before I started in reach. You know, always young people ask me what's the best way to be a vc. I said don't go work in a VC firm. Yeah, I'm really a big believer that is the biggest mistake as somebody can do. But again, I'm not trying. No, I'm also joking with you. Try to be extreme. And of course there are different way. Mike Moritz never operated is one of the top VC in the world ever. Right. So there is a lot of differences I'm saying in my interpretation of this job. When young people came to me and said what I need to do to be a vc, I always said go work in a company, go work in a startup, See the startup from the inside, learn, develop that level of empathy, try to figure that out. Then one day in the future you go and become a busy. Therefore then the question is, it is an interesting question. What you ask, what are the needed skills? Right. And look, I think at the end there are. I group them in some subset. I think one is you need to be strategic because you need to ask yourself, you need to look at things and try to think about how those things will evolve, change and not try to make a decision on what looks in front of you. Now in order to do that, you need to be strategic. So the question is how you learn about the strategy. I don't know. Look, I tell you, traveling is a great way to learn about strategy.

Yeah, Right.

Then there is another thing you do is you need to have a passion for products building because at the end you're supporting people that are building things to make the world in a very specific place. So that's why I always say the go and build the products. It's a great way to learn how, you know, I found the thing and then the most complex of everything is how do you learn about empathy? How do you learn about people?

Yeah.

And that is has to do with, you know, life experiences.

Yeah.

You know, the biggest life experience in my life where I think helped me to see a lot of things was, you know, in Italy when I grew up. I'm Italian, probably you can hear from my accent, I will say, You know, I to do immediately service was compulsory, but I didn't want to do it, so I objected. It was what was called a civil service and they sent me for a year in a drug community to help. That was for me an extremely interesting experience because I learned a lot about people and I learned how something seems obvious, they are not obvious. And now sometimes in Life there is one day that something might happen and your life takes a complete different view.

Yeah.

That type of learning that you are not going to learn inside a venture firm. And I can tell you that is extremely helpful when you are trying to understand the person you have in front of you.

Yeah.

So the long story short is I think we need to stop thinking that the future of jobs is to do this job as a c. As a junior. And we need to start thinking about what are the skills needed to do those jobs and education. We need to be redesigned because they need to figure out how to stimulate the intellectual curiosity of those people, of students around the skillset they needed. And a career path are going to be redesigned forever.

Oh yeah, for sure. I believe that AI is going to make not just venture become, you know, single gp, you know, more likely that we have more single gps, but just across the board. I think we're going to have a lot of businesses of just one person operating and doing some really incredible things. Right. And there'll be more and more and more of that because as you were talking, I'm thinking about this and I'm like, anybody can build almost anything now, you know, with, with very little, very little training and support because of AI. But like the thing that I keep thinking about that makes venture capitalists relevant is this like understanding humans, empathizing with them, getting those types of experiences. A very good friend of mine and John's, he's an incredible angel investor or seed stage investor and his background is he grew up in the slums of a developing country and you know, got to know what it, you know, what hustling actually meant when you know, it was a live or die outcome. Right. And has been able to very successfully take that perspective on human behavior and empathy and apply it to identifying founders at the very earliest stages that are, that are going to be successful. Right. Or at least have a high degree of likelihood. So yeah, I think that's super fascinating. This idea of like go out and get these types of experiences and then the beauty of AI is you don't have to go work for somebody else. You could just build a venture fund yourself and run it yourself. And assuming you can build a good track record and good performance, you can raise the money and be successful ultimately.

In the making, which you have enough intellectual curiosity to be able first to learn the skills. And one thing, Peter, that you said that I actually, I would love to elaborate on that. You said, look, I believe that we're going to see a lot of venture firms in which there will be solo gps. I actually think what is going to happen in the industry is going to be even better than that. The right sizing of the funds for a long time has not been anymore in many firms. That's why I think a benchmark is a bit different in many firms has not been function of the investment strategy.

No.

Has been function of the opex. Because the evaluation of cost imply what is the management fee then imply what is the fund size. So I actually think there is something more profound. I believe that with AI we are going to have better returns. And the reason why we are going to have a better returns is because venture firms have the opportunity to right. Size the funds to the investment strategy. Not anymore due to operational costs. That should imply much more significant multiples.

Do you think though that it's driven by operational costs or the more critical view, which is it's just driven by gps who want more management fee but isn't.

I mean, for their pocket? I don't know. Look, I mean I saw a successful EC at some point you realize that it's not, you know, you can make 100 million with carry. I mean, it's not like 1 million more with management fee is going to change your life, Right. I don't. I mean. So I think it depends. But I mean I give you an example, right? If you are a VC in Europe a you need to cover 15 different countries.

Yeah.

You need 20, 30 people to travel around.

Right.

Okay. Now that implies a certain cost. Yeah, it definitely implies a certain, you know, scale of fand size therefore somehow deteriorate. It's also deterioration of multiples because the fund size is function of that. Now what is beautiful. I have an incredible luxury. I don't need to think about number of people that I need to hire to cover Europe. As a result of that, I can actually decide the fund size based on the investment strategy, the fund, the construction and what to maximize the return to our piece and ultimately to us in terms of carrying. I think this is very cool because we lost this a little bit in this industry.

Yeah, I agree. Do you think though that fun sizes get bigger because the AI allows you to do more deals and so, you know, you. You just have a higher cycle of doing more deals. I mean, I feel like one of the big constraints has always been like time, right. It just. It's just hard to execute on that many deals in a relatively short time period. Investment period. There's also a time component of if you're taking board seats and how many companies can you realistically provide governance and support to. But I would imagine that AI would allow you to get more leverage and so we would see funds increase but also portfolio like number of portfolio companies increase, increase.

I think again it's back to what is the investment strategy? Yeah, I think we are going to see. I think there is an opportunity by the way and I would love to be able to look into that opportunity today. We are just starting thinking about it. That is what you just defined that I like to call it a high velocity fund.

Yeah.

So I think there is definitely an opportunity in that direction in the type of investment strategy that we do, you know, where we try to have meaningful level of ownership and relatively concentrated portfolio in a fund that we invest in 25 companies. Okay. I think AI, it's less about allowing us to invest in 50, it's more about allow us to invest in the right 25. So that instead of having one or two that become a multi billion dollar company, ideally we may have three or five and therefore return if you want more caveat to our IP and to us. So I think again it really depends on what is your investment strategy. Peter. AI is just a technology. Technology must be put inside an organizational design and a strategy. The AI don't decide the strategies. It's the strategy that decides how to use AI.

Sure, yeah. No, I agree.

And it's incredible how people are very confused on this very basic topic.

At least for now we're the ones that tell the AI what to do.

I feel like I'm an agent more and more. If I were starting a fund right now in the seed stage in Europe, which I'm not, but if I was and with the.

You can join us if you want.

Is that a binding legal offer?

Don't give down ideas.

Let me ask a dig.

If I were starting a fund in.

Europe.

With like an AI counterpart, what's the ideal structure and size in 2025?

So I mean on that front I can give you a very clear answer, John, because I had zero legacy. So I built in which exactly with that in mind. Right. What is the right. What is the best possible setup for an early stage venture fund in Europe to maximize returns? And I believe it's a combination of factors. First of all, having the right skills and the right people around the table as a gps. And again the reason why I emphasize that is because you must realize that if you're using AI you actually have a different type of investment process. You know, you don't spend any more your time to go to nice Hotels, having nice dinners and you know, traveling around. You know, you spend a lot of your time looking at data that the AI gives to you, right? So it's a different type of job that is not for everybody. So you need different type of people that can happy to work on a different type of investment process. If you get somebody working in a different firm that has been working all his life into a legacy investment process, they will struggle like crazy. Okay? So first of all, you need to have the right type of people that I believe are operators, of course, with an investment background, but fundamentally deeply, they need to understand the product technologies. They need to be okay to use a new type of investment process. The second thing in Europe, look, this is something that I am a big believer of. Venture capital as a business, in order to work as a business, must be predictable. What do I mean with that? Is that you need to be able to build an engine that provide returns in a consistent way. You cannot provide returns every five funds. You need to be able to provide returns every single fund. What does it mean? It means that, look, In Europe, a 3, $5 billion exit is actually a good exit. Okay? In the history of Europe $100 billion exit, we had very few of them. So you need to be able to build a business because venture capital is a business in which if you have a three $5 billion exits, you can make a lot of money to your LPs. So that means that if you grab one, you should be able to do 3, 5x. If you do two, you should do 5, 10x. Because this is what venture capital at least expectation.

Maybe more specific. Let's say like an example with AI could me or maybe me and like three people be successful as like the ideal sized fund maybe?

Yeah. Yeah. So John, the answer was trying to.

Give you $100 million fund.

Yeah. The reason why I was trying to explain you, sorry, share with you this math was because I was trying to say the second thing after the people that is very important is the fund size. The fund size must be somewhere between 50, 70 million if you want to do 10x in Europe. Okay, that's the first thing. Then the second thing has to do with how many GPS do you need? You know, I believe that you need. It depends on how long you've been around. Because it's also function of how big your portfolio is going to be. But you know, the way how I think about the matter around which we built in, which was, you know, in a fund you need to have about four GPs and then having fund you need to add a new one. That's the way how we think about it. And then you need to use AI to recompletely redesign the investment process. So this is a very basic concept. But you're not using AI to enhance the existing investment process. You must be ready to redesign it. This is not about, you know, I'm using an Excel spreadsheet or to. To help me to back an investment decision. This is about the investment process is different. And you need, in my humble opinion, in the early stage, it's all about the sourcing. So you are redesigning the way our investment process work. Because instead of, you know, waiting for entrepreneurs to get in touch or for entrepreneurs or instead of using your network, you need to do a different type of investment process that implies a lot of outreach. So the components of new organizational design, different type of AI, different fund size, all of that is what I really believe. So the summary is you need to have a 50 to 70 million. You need to start with somebody around the four GPS. You need to have enough money to pay for the technology. We actually invest more than the management fee to build the AI just for being clear. And you need to be able to be comfortable to use a different type of investment process that implies a different way to spend your time. Okay?

Not as many fancy dinners, more data labeling.

It's the root of reality, right? It's the root of reality is that you travel a much less. You have a much venture. Somebody, a good friend of mine, a GP in the US A very successful venture forever. I don't tell his name. He always told me, you know, denture. It's a very glamorous job. Okay? I'm telling you, the new venture AI is not glamorous. It's a very practical working class job. That is good. It makes us humble.

That's fair. That's fair. It is a little depressing though that the glory days eventually.

It's a beautiful. The substance. The substance is what matters. It will tease the substance of adventure capital. It's only one every opportunity to talk to amazing people that tell you amazing stories. All the rest, it's. We created an industry that is full of that. But the reality is the fundamental of what makes this job beautiful. That is the reason why people work. You and I spend our life, you know, nothing more important. I couldn't imagine nothing more beautiful to do is because we thought fundamentally love is the substance. The substance here. Meeting people that tell you things, you say, wow, I never thought about that.

Roberto, this has been a really fun Conversation. Thank you for joining us on the podcast today. And I don't want to ruin it by ending on anything other than your last comment because I think that is the thing that that gets me excited to wake up every morning and I think it's a similar story with most of the best VCs out there. So thank you for taking some time with us.

No, thank you to you guys for hearing me. Thanks a lot. I really appreciate was fun.

Roberto, how can our audience find you and keep in touch or track what you're doing with and reach.

So this is another way how you use AI? I think a venture capitalists GPS are scared for people to get in touch. You know these are why they're scared for people to get in touch is because they are incapable to use tools to manage the volumes. So I encourage any person who wanted to get in touch with me. It's my job. I have nothing more important to do. They reply to founders. So the best thing to do is use a link or email me. Roberto, @enrich ventures.com I am very passionate around the fact that our job, Peter is to apply to founders. This thing that we are too busy that we can't reply to founders. Can you imagine if Amazon will stop selling to customers? I have too many customers. I don't sell anymore.

Yeah.

It's unconceivable. Right. So our customers are the founders. So any entrepreneur that want to get in touch with me, I encourage them and it's my job to apply to it. And if I cannot do that, I don't deserve it. To have a job as a gp.

Yeah, yeah.

And if I cannot create a workflow using AI or using any system that allows me to stay on top of that, it means that I don't know how to do the basics of my job.

Yeah, yeah. Especially as a technology investor.

You will be surprised how many people are unable to apply to image.

Oh no, I know.

By the way, I also asked that.

Question of every email.

I also asked that question to founders. You know how. How many unread emails do you have in your inbox?

Yeah.

Oh, I'm stupid. You know, I'm too busy, I'm too cool. You know, I can't. By the way, if you don't know a friend, you cannot get in touch with me. You need to go to my network because otherwise I am. It's too tough for me to read what you write.

Yeah.

Can you imagine that? It's so crazy.

Yeah.

So yes, LinkedIn email. I will always reply.

I love it. Well, thank you, Roberto. And thank you to our audience for listening to this episode. Please like and subscribe, comment and follow Roberto. He's doing some really interesting things over in Europe.

More importantly, you guys are doing some very good things. And I love also all the. Your project is really amazing. Thank you.