Three Black investors share their tips on preparing for the new year.

Table of Contents

Introduction

This year has been anything but dull for investors and founders alike. Just as the venture capital boom of 2021 began to slow down, the startup and VC worlds spun into a whirlwind, reshaping the landscape in ways that are both exhilarating and unsettling. The old adage about ‘growth at all costs’ gave way to a more measured approach, one that prioritizes sustainability over hyper-ambition. As 2023 unfolds, the focus for investors seems to shift toward trends that offer promise—and a higher likelihood of long-term returns.

AI and Generative AI

Artificial Intelligence inVenture

The rise of generative artificial intelligence (AI) has already begun to leave its mark on the startup and VC ecosystems. As highlighted by Xfund’s Vice President, Jadyn Bryden, this technology is poised to transform entire industries by streamlining workflows across sectors such as sales, social media, marketing, and content creation. Bryden sees AI as a game-changer for businesses that were once reliant on human labor in these areas.

Bryden explained, "I’m looking forward to seeing how AI can contribute to scaling previously human-led areas of business, such as sales, social media, marketing, and content development." This vision aligns with the broader trend of leveraging AI to augment human capabilities while reducing operational costs.

Vertical Software: A New Frontier

In the realm of vertical software, investors are increasingly drawn to solutions that provide workflow enhancements across specific industries. Richard Kerby, a general partner at Equal Ventures, has identified several promising sectors where this approach could yield significant returns:

Supply Chain Management: Tools that optimize inventory and logistics.
Logistics: Platforms that improve delivery efficiency.
Insurance: Software that enhances risk assessment processes.
Healthcare: Solutions that streamline patient care and operational efficiency.

Kerby emphasized, "Vertical software has the potential to create exponential value by addressing niche market needs in a highly targeted way."

Founders’ Success: Overcoming Underrepresentation

The 2023 startup landscape continues to highlight significant disparities along underrepresented lines. Bryden observed that "the venture capital industry remains woefully inadequate in addressing the unique challenges faced by underrepresented founders." This sentiment is echoed by numerous investors and experts, who are increasingly vocal about the need for greater diversity within the VC ecosystem.

DEI Trends

The push toward diversity, equity, and inclusion (DEI) is no longer a passing trend; it has become a defining feature of modern entrepreneurship. Bryden notes that "diverseFounders can expect to see their representation increase in the coming years." This shift reflects not only changes in investor priorities but also efforts by companies themselves to create more equitable ecosystems for growth.

About Venture Dominic-Madori Davis

Venture Dominic-Madori Davis is an influential figure in the startup and VC worlds, known for his deep insights into innovation and entrepreneurship. With a career spanning both sides of the entrepreneurial spectrum, he has built a reputation as one of the most forward-thinking leaders in the industry.

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