Technology and Tools
The Role of AI and Tech Stacks in Early Stage Fundraising
AI has impacted startup trajectories, and investors are interested in forward-thinking founders. Adopting an AI-first approach and mindset is becoming necessary to get ahead of competitors and stand out to investors. Startups significantly using AI are raising more money in the pre-seed and seed stages than those who are using somewhat to no AI.
- Using generative AI to write or edit outreach emails and messages
- Using AI-powered platforms to find and connect with investors
- Conducting AI data analyses to pull relevant data for pitches
- Managing investor relationships in AI-powered CRMs
- Researching their target market and key audiences using conversational AI tools
- Analyzing market trends and investor interests with AI fundraising tools
"It always surprises me when [founders] don't adopt and use AI in how they approach fundraising. You see so many investment rounds still being done on Google Sheets. Fundraising is seen as a chore. But if you can adopt a CRM (AI-enabled, or otherwise) to involve your existing shareholders and investors, that's massive.
Fundraising is survival of the fittest. The more organized and methodical that a founding team can be, they're much more likely to at least get a quick ‘no.’ We want to enable people to be strategic, rather than a spray and pray approach."
Jason Druker
Chief Commercial Officer at SFC Capital
The role of AI in investment decision-making
"Just as startup founders are bringing AI tools into their workflows, VCs and investors are using AI to evaluate potential investments, manage their portfolios, and negotiate deals. Tracxn, for example, is a human-in-the-loop platform that helps investors, VCs, incubators, and private equity firms analyze startups and provides detailed information like market maps, factsheets, valuations, and captables.
"One of the ways we use AI that I find incredibly helpful is from the perspective of how we grow the portfolio and try to find outperformers,” says Jason. “Once we've made an investment, we ask every company to report to us every quarter. From that information, we draw our insights using AI, which helps us report to our own investors. We receive reports from 400 different companies — both structured and unstructured data — and now the quality of our reporting is really high. With the help of technology, the cream of the crop will rise to the top."
And startups should consider how they’re presenting information to investors and find ways to use AI to quickly and clearly share data, forecasts, and analyses during the high-stress due diligence phase.
Additionally, startups prioritizing AI within their tools are piquing investors’ interest. “HubSpot Ventures invests in early-and growth-stage (Series A and beyond) software companies with the potential to deliver unique value to HubSpot's customer base.," share Nate Morgan, a HubSpot Ventures investor, and Brandon Greer, the Senior Director of Corporate Develompent at HubSpot and Head of HubSpot Ventures.
"Whether it's an AI-native startup or another type of software company, we look for founders who share our mission to help millions of organizations grow better, as well as products that deliver on a shared value proposition of being easy to use, fast to deliver results, and unified.
"What we also look for, and what founders shouldn’t underestimate, is the power of a strong community when it comes to securing funding in a competitive VC landscape for AI-native startups. Building community within your early customer base and partner ecosystem means you can develop it over time, and a large (and loud) community online tends to stand out over everything else."
Brandon Greer
Head of HubSpot Ventures
of early-stage founders have used an online fundraising platform to raise capital.
Fundraising tech stacks
Startups are on board with working smarter and harder. They're using tools to connect with investors, manage investor relationships, source capital via crowdfunding, find community, access free resources, and build their personal brands.
The most popular online fundraising platform used by our survey audience is AngelList, followed by Crowdfunder and Kickstarter. To keep up with investor relationships, startups have also ditched spreadsheets for software tools. The top three tools that early-stage founders say are the most effective for managing investors are communication platforms like Slack and Zoom, investor relations platforms like Carta and Seedinvest, and CRM software like HubSpot.
"The biggest piece of advice I would give is to take the time upfront to set yourself up for success,” shares Olivia O'Sullivan, Partner at Forum Ventures in the Startups Scaling Smarter series “Set up a CRM so that you can work through the stages. Add any investor who tells you, 'We might be interested,’ to a nurture bucket in your CRM. Anytime something big happens, send an email update to that whole list of people in the nurture bucket." Fundraising is really hard. We're seeing it take some people quite a few first meetings, sometimes over 100 first meetings, to get around that."
Olivia O'Sullivan
Partner, Forum Ventures
HubSpot for Startups customer story: Forecaster
HubSpot for Startups customer story: Sleek Tech
