How To Evaluate AI Startups for Investment

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Artificial intelligence brings a new type of startup to the investor for funding.

Here is how to evaluate AI startups for investment.

Market opportunity.

For new applications that have never been done before, AI offers a greenfield opportunity.

Estimate the current size of the target market and the value of selling to each one.

This often generates an outsized total available market as one solution could cover the entire market.

For existing applications that AI enhances, use the existing sales figures for products sold into the market and add the incremental value of the AI-enabled product.

Product opportunity.

Review how AI-enablement will enhance the capabilities of the product.

Will this be a major or minor productivity improvement?

Moat.

How much of a moat will AI bring to the product?

The more algorithm tuning and training data used, the stronger the moat.

Deployment.

What will it take to deploy the solution?

The broader the go-to-market strategy, the more valuable the product.

Consider these elements in evaluating an AI startup for investment.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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