1Mby1M Virtual Accelerator AI Investor Forum: Warren Packard, AI Fund (Part 1)

Warren Packard, Partner at AI Fund, discusses his firm’s investment thesis. Instead of founders pitching, the AI Fund operates as a Venture Studio and recruits repeat entrepreneurs with domain knowledge to build ventures based on their ideas.

Sramana Mitra: Today, we are going to start the session with Warren Packard, partner of AI Fund. Warren has been in the business for a very long time, and I’ve known Warren for a very long time, although we haven’t had a chance to catch up. So, this is a perfect opportunity for us to catch up.

Welcome, Warren. Great to see you.

Warren Packard: Great to see you too. Indeed, it’s been a long time, but we’re doing great and doing the right things, right?

Sramana Mitra: Trying to do great. You know, I don’t envy Tim Cook these days.

Warren Packard: Well, I wouldn’t put him low on the bucket, if you will. Entrepreneurship is a rollercoaster, right? Today, we don’t envy him. Tomorrow, we envy him…

Sramana Mitra: Well, he’s had a fabulous run so far.

Warren Packard: Absolutely.

Sramana Mitra: Let’s focus on AI fund and what you’ve been up to. You’ve obviously switched gears from the last time we spoke. What is AI fund? What is the thesis and how have you positioned?

Warren Packard: We are a bit of a different animal altogether from a traditional venture capital fund. We did announce the closing of fund two, just recently, which is $190 million fund.

The way that in which we’re different is we are a venture studio rather than a venture capital fund. Being a venture studio, we are co-founders in all the companies in which we ultimately invest. Rather than encouraging entrepreneurs to come to us and pitch their companies, we are a magnet for ideas, opportunities, and business concepts. Then. we take those opportunities and build companies around them.

Most of our limited partners are corporations, and these corporations have all sorts of great ideas bouncing around their four walls that they won’t ever commercialize for whatever reason. Usually, the reason is that they’re non-strategic, because they certainly would commercialize their strategic companies. For instance, we might hear from the legal department inside a large corporation that there’s an incredible inefficiency. They said that we can see that not only do we have this problem, but thousands of other large corporations have this problem. Let’s go start a company to solve this problem.

That’s what we do. On my team, I have four business builders and four technology builders. My partner Linda runs recruiting. My partner Eva runs legal, and we have all the elements to start and build a company. The key to everything we do is hiring a founder.

It’s kind of backwards, it’s a bit unnatural, where we go out and we find a passionate, smart driven founder who comes in and builds the company with us. Then ultimately, that person takes the business forward as the CEO and off to the races, and building a company and getting a product in.

I’m sure we’ll talk more about that, but we’re a venture studio. That’s probably the bottom line.