Bure Valley Group is an investment introducer platform which links successful investors with exciting, innovative UK startups seeking funding. This content is for information purposes only and should not be taken as financial or investment advice.
Artificial intelligence (AI) has been a hot topic of conversation for a few years now. Big tech companies were spurred into action in 2022 when OpenAI released ChatGPT to the public. Keen not to be outcompeted by Microsoft (which had partnered with the former), Google pushed out its Bard model (now called Gemini) – perhaps before it was fully ready.
The proliferation of AI technologies has been particularly influential in the early-stage business landscape. Startups have sprung up over the last two years, seeking to capitalise on the AI interest and serve niche markets. Yet, how transformative has AI truly been for startups? How sustainable are AI startup models?
Below, we examine these questions in more detail for our early-stage investor readers. We hope these insights are useful. To learn more about our EIS projects and other early-stage opportunities, visit our portfolio page. For enquiries regarding our latest projects and funding, you can reach us via:
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AI and startup innovation
Before ChatGPT arrived in November 2022, there were certainly still plenty of innovative startups for investors to consider. However, the introduction of generative AI has dramatically changed how many startups do business.
Product ideas and prototypes can be crafted using predictive modelling. By using machine learning and AI algorithms to analyse market trends, startups are better equipped to identify customer needs and preferences ahead of time. This helps founders make better strategic decisions, grounding them in solid data (much to the reassurance of potential investors!).
AI has also changed how startups conduct client relationship management (CRM). Repetitive tasks, such as customer data entry, are more easily automated. The technology can also assist with analysing this data as it compiles, facilitating the analytics process and facilitating better interactions with customers.
Buying behaviours for specific segments can be identified more easily (something which formerly often required expensive hardware, software subscriptions and human staff). Rather than simply reacting to customer needs when they arise, predictive modelling can help to preempt them. This creates a greater sense of customer care, boosting the startup’s brand image and enhancing customer loyalty.
AI and fundraising
Startups naturally require investment to grow. Here, AI is also having a big impact on the venture capital (VC) process and angel investment. Founders can put themselves in the shoes of potential investors and use AI models to evaluate market volatility, regulatory changes and the competitive landscape (i.e. due diligence factors that investors will want to consider).
By mapping the risk landscape more effectively, AI can allow startups to take more calculated risks. Perhaps new ideas can be taken to market and be scaled more quickly. Indeed, since AI allows startups to do “more with less”, they might opt for the bootstrapping route over VC funding for longer (something for angels to consider).
AI tools can now also be valuable for the pitching process. Tools now exist for founders to generate pitch decks. Other tools assist with creating business plans that help investors grasp the short and long-term goals of the business. These solutions can also produce robust financial predictions and marketing plans. A third type of tool helps startups reach out to their target market (e.g. via online polls) and present the findings clearly to investors.
AI and product development
Testing is vital to determine how likely a new product is to succeed. Again, AI tools are making this process more thorough and faster. Rather than spending vast sums to design mockup programmes and months to test ideas, founders can do this in minutes. A case in point is JetBrains, which uses AI to help startup developers test their product code more efficiently.
AI tools are also revolutionising how startups go to market. Here, the scope of tools is truly vast and difficult to map comprehensively. For instance, AI solutions can help provide social media captions for audiences on Instagram, Facebook, LinkedIn, and Twitter. AI-driven meta-description generators now exist for bloggers. Founders can also use AI to craft a chatbot for their website without coding experience.
More broadly, AI can assist startups with rapidly expanding manufacturing and shipping networks. Supply chains can be managed more effectively, with founders more equipped to identify and address scaling interruptions and supply disruptions (e.g. shipping process issues). AI tools can also help startups with hiring, removing many of the higher costs of traditional recruitment services.
Leads can be funnelled and nurtured in a sales pipeline with less human error, allowing for better follow-up. Calls and emails can be answered more efficiently. Business risks can be spotted and averted more quickly. Investor relations can be managed more transparently with more regular and accurate reports. Startups can keep tabs on their business data without the process becoming too time-consuming. For instance, AI tools can spot a decline in email sign-ups or website traffic, alerting managers quickly so they can fix the issue quickly.
Invitation
Interested in learning more about exciting startup projects and how AI affects their prospects? Why not check out what we offer investors here at Bure Valley Group?
Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available here:
+44 160 334 0827
