Q&A with Suman Talukdar of AiSproutsVC

Investing in AI today is critical because it's not just another tech trend; it's a fundamental shift reshaping entire industries. AI has the potential to revolutionize sectors like healthcare, finance, transportation, and more by increasing efficiency, improving decision-making, and unlocking entirely new business models. Early investments in AI will likely capture outsized returns as the technology becomes embedded in every aspect of our lives, similar to how cloud computing transformed businesses a decade ago. Moreover, AI-driven companies are creating a competitive edge, making now the opportune time to get involved before the field explodes in prominence.

When evaluating AI ventures, we also focus on the purpose behind the technology—how it amplifies human potential. We believe the most valuable AI solutions are those that enhance human capabilities, empowering people to make better decisions, work more efficiently, or unlock new possibilities. Whether it's streamlining complex workflows, improving safety, or accelerating breakthroughs in science, the AI we invest in should elevate human productivity and creativity. Ventures that align with this philosophy are more likely to have a lasting, positive impact, making them valuable both commercially and socially.

As an investor in AI, you can expect the potential for outsized returns, particularly in the early stages of this technological revolution. In venture capital, returns are typically driven by power-law dynamics, where a small number of winners generate the majority of the fund's gains. In AI, this is even more pronounced—category-leading companies can dominate their sectors, creating massive value and delivering outsized returns. As a result, the success of one or two top-performing AI ventures can drive the overall return of the fund, making early-stage AI investments an attractive opportunity despite the inherent risks.

Our first fund is already showcasing strong performance. While we've made over two dozen investments, a select few now account for the majority of the fund's value. Our best performing company has gone from no revenues in 2020, to over $50M this year (raising over $180M in capital). With industry statistics showing Series B investments delivering 3-5x returns and Series A investments achieving 10-15x, the fund is on track to deliver overall returns of 3-5x (3x being the average for emerging fund), with our seed-stage portfolio expected to yield 5-7x returns.

However, as with all venture investments, the returns can vary and there is significant risk of losses. The above estimates are based on our projections and are not promises. Early-stage investments can be higher risk but also offer the chance for exponential returns if the company becomes a market leader. Our primary focus (and driver of success) is on identifying ventures with the potential to return 3 times the fund, aiming for portfolio companies that can achieve unicorn status by solving critical, large-scale problems with AI.