AI Is Rewriting Venture Capital

Why AI makes picking the right venture managers more critical than ever.

By Rodrigo Gómez, Fund of Funds Portfolio Manager

The venture capital market is being structurally rewritten. Artificial intelligence is changing how companies are built, how quickly value is created, how cheaply teams can scale, and how investors identify the managers capable of capturing that value.

VC4 is A.GAIN’s fund-of-funds strategy, focused on identifying and accessing venture managers positioned to outperform across changing technology cycles and market environments. In a market moving this quickly, diversification still matters, but passive diversification is no longer enough. The advantage lies in judgment, adaptability, and access to managers who can see where the next wave of value creation is forming before the broader market does.

We believe this is where the fund-of-funds model becomes more relevant. The right fund of funds does more than diversify exposure. It selects with conviction and criteria, interprets complexity, and gives investors a more disciplined path into the venture ecosystem.

AI as a New Operating Layer

AI is often described as a sector, but it is better understood as a new operating layer, reshaping how businesses operate, innovate, and create value across nearly every industry. Stanford’s 2026 AI Index reported that 88 percent of organizations used AI in 2025, up from 55 percent in 2023, while U.S. private AI investment reached $285.9 billion, almost three times the prior year. In 2024, Generative AI alone attracted $33.9 billion globally in private investment, up 18.7 per cent from 2023.

That adoption is changing the mechanics of company building. Bessemer’s Cloud 100 benchmarks show that traditional cloud companies have taken an average of 7.5 years to reach $100 million in annual recurring revenue, while AI startups are reaching the same milestone in roughly 5.7 years, some even faster: Lovable in 8 months, Cursor in 12 months, and Anthropic in 18 months. In some cases, the growth curves are even steeper, with AI-native companies doubling ARR in a matter of months rather than years once adoption takes hold. AI is compressing the path from idea to product, distribution, and revenue, while lowering the cost of execution.

As value creation accelerates, the window to identify category-defining companies narrows. As costs fall, more companies can be built, funded, and tested. As information becomes abundant, anyone can produce market maps and first-pass analysis almost instantly. The advantage lies in access, judgment, and knowing what to do next.

Manager Selection Is Becoming More Complex

Before the internet, information itself was scarce. Then it became searchable, though organizing and interpreting it still required real work. Today, AI has made much of that processing widely available. A market comparison that once took days can now be produced in minutes. But speed is not judgment. Data is not insight. Pattern recognition is not conviction.

The venture ecosystem is also larger, faster, and more fragmented. Capital is concentrating around a smaller number of perceived winners. PitchBook reported that in the first quarter of 2026, just the top 5 U.S. venture firms raised 73.1 per cent of all new venture capital committed, while the next top 10 raised another 15.4 per cent. But that concentration does not mean the best future returns will only come from the largest platforms. Some may come from emerging managers with deeper specialisation or sharper sector access.

The challenge is accessing the right managers at the right time, especially in a market where return dispersion is likely to remain significant.

We believe AI will widen the gap between strong and weak venture managers. The best managers will use AI to think better, not simply move faster. They will identify value earlier, underwrite companies with sharper context, and support portfolio companies with more operational leverage.

The Fund-of-Funds Model Must Become More Selective

For us, the strongest managers in this environment, know how to identify value before it becomes consensus, and they have the access to reach compelling opportunities early. They move quickly without becoming reckless, think beyond the obvious market narrative, and enter each investment with a clear view of liquidity and eventual exit pathways.

These qualities have always mattered in venture capital. What has changed is how much more important they have become. Adaptability matters because technologies, business models, and competitive dynamics are shifting faster. Judgment matters because information alone no longer creates differentiation. Access matters because the most attractive opportunities remain difficult to reach.

This is where a thoughtful fund-of-funds strategy can offer a clear advantage. A strong fund of funds helps investors navigate an increasingly complex manager universe. It evaluates managers not only by past performance or brand recognition, but by their ability to win in the market that comes next.

At VC4, our role is to identify the managers positioned to outperform in this environment. That means understanding where technology is changing company formation, where capital is flowing, where valuation discipline matters, and where the next generation of venture returns may emerge. It also means using the broader A.GAIN and IDC Network ecosystem to strengthen access and perspective.

AI has made the venture ecosystem faster, broader, and more competitive. It has also made manager selection more important. For investors seeking diversified exposure to venture capital, the real challenge is how to diversify intelligently. That’s where we believe VC4 is built to help.