Fueling founders, part 2: AI for the founder guy

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Founders have a friend in AI: Artificial intelligence is clearly more than a flash in the pan. See how you can use it to push your business forward amid uneasy economic times.

At this stage of the game, it’s undeniable that AI is here to stay. Whether you embrace these new technologies with open arms or take a more reserved approach, it’s important to understand what it means for your business.

Per most industry reports, including Fidelity Private Shares’ latest, AI is what venture capitalists are into right now. It’s been driving up deal sizes since 2024 and creating a central hub on the West Coast. All of that is nice to hear, but the goal is to help founders utilize this new tool to keep moving forward.

In this economy?

While we all joke about recession indicators (A-listers doing ads, increased interest in the LSAT, the rise of tchotchkes, etc.), AI isn’t saving the US economy right now, but it seems to be where investors are placing their bets. While some skeptics call it a bubble, we’re hoping not to see an economic collapse.

A report from Fidelity Private Shares found that in 2024, AI deals accounted for 46.4% of US VC deal value and 28.9% of US VC deal count, creating the illusion of an organic rebound. When excluding AI, 2024 US VC activity falls to 10,850 deals closed and $112 billion raised, marking three consecutive years of decline.

Love it or hate it (or just use it to write grocery lists), AI is the new backbone of venture investments. But AI isn’t just maintaining investment numbers. It’s driving them up.

According to Fidelity Private Shares, the 51.5% YoY increase in capital invested was driven primarily by AI deals in the San Francisco Bay Area. And AI deals have the potential to continue to fuel check-writing momentum in 2025.

If it’s getting venture capitalists to reach into their checkbooks, it’s worth getting to know. You don’t have to be an AI company to get in on this, either.

“AI isn’t the point of the company (being funded),” Kristen Craft, vice president of strategic partner management at Fidelity Private Shares, said. “It’s what supercharges the company.”

Craft encourages companies to tantalize investors by sprinkling AI in where it makes sense. If it can help with things like achieving lower costs, driving innovation, and producing novel methods to reach strategic objectives, it can strengthen your company’s bid for funding.

West Coast, best coast?

When it comes to food, absolutely not (hot take). When it comes to AI companies, go west, young founder.

According to Fidelity Private Shares, this trend is most evident in the Bay Area, where the median deal size has increased from $8 million in 2024 to $10 million YTD, while the average deal size surged from $49.6 million to $137.2 million. In comparison, New York’s median deal size has held steady at $5 million and its average declined to $14.6 million, underscoring the stark impact of AI investment activity on ecosystems with differing sectoral strengths.

This information may look scary. The knee-jerk reaction to uproot your entire company and move to an expensive rental in San Francisco may strike fear into the hearts of accountants. But while it does have a higher concentration there, this could open opportunities for the rest of the country.

According to both Craft and Rudina Seseri, founder and partner at Glasswing Ventures, good fundamentals are still important. By prioritizing revenue, keeping a clean cap table (which Fidelity Private Shares can help with), maintaining fundraising documents, and implementing AI, you can demonstrate to investors that you mean business.

Good fundamentals will always look good. It shows you care about proven methods, while being inclusive of AI shows a willingness to try new things to keep the wheels running. Stand out in your own region like that, and you could spark some real interest.

Headcount head-scratchers

A recurring theme in 2025 is how teams can do more with less—less budget, less time, and fewer team members. This could feel like trying to draw blood from the stone, but it coincides with the rise of AI.

According to Fidelity Private Shares, companies are being asked to show more traction and revenue than they have in past periods, using lower headcounts through the tactful use of AI and AI agents. Valuations have held up for pure-play AI companies, but firms in other sectors are raising smaller rounds at lower valuations and being asked to do more with them.

This is how you, as a founder, can take concrete steps to embrace AI and support your company. It doesn’t mean replacing any human jobs, but it may mean setting up agents to help support human employees. Not all companies can afford to hire 10 new people YoY, but that doesn’t mean they don’t need help as they scale. That’s where the agents can support your people on their path to the next level.

The truth is, it’s hard out here for a founder. But when the going gets tough, the tough get tech-savvy. There’s a number of ways to use the AI trend to your advantage. If it helps you up your deal size, stand out in a crowded field, or even just assist your employees, it’s worth a good college try.

Those programmers didn’t spend all that time developing AI for nothing. Use it or lose out. Fidelity Private Shares wants to help by pushing you to try something new. You might even like it. By putting a few key insights from their guide into practice, you could see some major results.