1Mby1M Virtual Accelerator AI Investor Forum: Marina and Nick Davidov, DVC (Part 1)

Marina and Nick Davidov are Cofounders and Managing Partners at DVC, a firm that backs only repeat founders doing AI startups. We had a terrific conversation on cutting edge issues within the AI ecosystem.

Sramana Mitra: Today, we have Marina and Nick Davidov, co-founders and managing partners of DVC. Welcome, Marina. Nick. Good to see you.

Nick Davidov: Hi. Thank you so much for having us.

Marina Davidov: Good morning. Good day.

Sramana Mitra: Where are you joining from?

Nick Davidov: We’re in Los Altos, California.

Sramana Mitra: Okay. Tell us a bit about yourselves, your backgrounds, and what you’re doing with your fund.

Nick Davidov: Marina and I are a husband and wife team running a venture capital firm. We’ve been working together for the last 18 years across multiple startups and funds, often switching sides of the table.

Sramana Mitra: What kind of startups have you been active in? What’s your background?

Marina Davidov: We’ve been very consistent with our thesis—whether it’s startups or funds. We’ve been investing in and working on AI for the last 12 years.

Nick Davidov: Yes, AI has been our focus for the last 12 years, both in startups and funds. We’re not part of the crowd that recently switched from crypto. That’s not us.

Sramana Mitra: Let’s double click on that. What is your AI investment thesis?

Nick Davidov: Quick background—we fell in love with AI about 12 years ago. We were big investors in advertising technology, one of the first real-life applications of machine learning. We helped companies figure out who their target audience is. The reality is, most companies don’t know their target audience. Platforms like Google and Facebook assume companies know who they want to target—but they often don’t.

By collecting data and using machine learning, we can identify patterns and dependencies that reveal the true target audience—sometimes surprising ones. For example, your ideal customer segment might be people with red hair, something you’d never guess.

We started experimenting with this, and some of our products were incredibly successful. That led us to realize the potential of AI—especially in boosting human productivity by connecting computers to all aspects of human society.

At first, we thought the best interface would be computer vision, because the world is so visually complex. But over time, we saw that since humans describe almost everything using language, language became a universal API. So, we now use language models to interface with many areas of civilization.

Our investment thesis focuses on the application layer. While foundational technologies are important and valuable, they come with high capital intensity and risk. We prefer areas where you can achieve a lot with very little capital, which is usually at the application layer.

Sramana Mitra: What is the size of your fund?

Nick Davidov: We have two funds. One is $40 million in committed capital, focused on pre-seed and seed. It’s backed by 165 LPs, mostly engineers and founders in Silicon Valley. The second fund is $75 million, focused on Series A.

Sramana Mitra: You are based in Los Altos, California, which is in the heart of Silicon Valley. What is your geographical radius of investments?

Nick Davidov: As far as I can see out the window. There are definitely enough startups in the neighborhood.

Sramana Mitra: So you invest only in the Bay Area?

Nick Davidov: Mostly—about 90%. We do have a bit in London, Cyprus, and Portugal, but 90% is here.

Sramana Mitra: Largely here. And?

Marina Davidov: We also invest mostly in repeat founders. In a constantly changing environment, experience matters a lot. You need to test hypotheses quickly and pivot often. Repeat founders usually come prepared with that experience.