Former Greylock general partner Sarah Guo's new firm Conviction Capital plans to incubate and invest in AI companies up to the Series A round.Venture capital is prone to hype cycles, like the funding glut for Web3 last year and for artificial intelligence in the late 2010s. Now, AI has returned to the zeitgeist but venture capitalist Sarah Guo is confident the hype is here to stay—so much so that she’s staking her new VC fund on that bet.
Guo announced Tuesday the first close of a $101 million debut fund for her new investment firm Conviction Partners. After spending nine years at Greylock, where she rose through the ranks to become the Silicon Valley firm’s second female general partner, Guo left the firm in June. With Conviction, she plans to invest in AI startups up to the Series A stage with check sizes between $1 million and $10 million.
For example, she has recruited a visiting scholar to conduct AI research, and says she plans to hire more academics who might build new models and collaborate on ideas with startups Conviction invests in. “We’re not going to assume the traditional knowledge of what a venture firm thinks belongs in house and out of house,” she toldin an interview. She pointed out that for generalist firms, hiring a team of AI researchers “doesn’t make sense.
Guo grew up in Wisconsin as the daughter of Chinese immigrants who worked at Bell Labs before becoming tech entrepreneurs. She became immersed in technology as a teenager, building a website for her parents’ company. After graduating from the University of Pennsylvania, she worked two year stints at broadband network startup Casa Systems and on tech investment banking at Goldman Sachs.
But it was AI that stuck with her most of all. She says she seriously considered quitting Greylock to start a company with Google Brain cofounder Andrew Ng in 2016 . Still, like Web3 last year, AI had a VC hype cycle of its own which fizzled out once the technology and revenue proved to be growing too slowly. “A couple of very smart investors asked me over dinner in 2018, in the trough of disillusionment [about AI], what I’d gotten wrong about bots and natural language,” she said.
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