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AI has swept the venture capital space by storm, and AI startups have received more than half of all VC investment dollars so far in 2025. However, a subtler narrative is also deeply impacting the industry: AI is radically changing how venture capital firms source portfolio companies, do diligence, manage portfolios, and communicate with LPs. In this piece, we’ll quickly dive into how AI is shaping what investors are investing in, but then dedicate the majority of our report to analyzing how AI is changing the VC investment process itself. 

From a Q&A with AI-powered sourcing platform Specter about how VCs are using filterable signals to find the right prospective investments more quickly, to a case study with Riot Ventures on how AI-driven deep research is turbocharging diligence, to a look at how Standard Metrics is powering data collection and easier analysis via AI, this guide is your one stop shop for understanding the AI tools and processes VCs are adapting to transform their investing process behind the scenes.


Excerpt

Behind the scenes, AI is also changing how VCs invest. From sourcing to LP communication, leading VCs are redesigning workflows around AI:

Sourcing: Using AI to continuously collect and analyze live market signals (from product launches and hiring trends to funding activity and web traffic) so investors can identify promising startups earlier, filter opportunities with greater accuracy, and focus outreach where traction is already building.

Diligence: Leveraging AI models and structured data to evaluate new and existing investments more rigorously and more quickly.

Portfolio management: Centralizing portfolio data from multiple sources and using AI to keep it clean, current, and comparable. Automated alerts flag shifts in key metrics like burn, revenue, or churn, enabling investors to spot issues early, guide founders proactively, and base follow-on decisions on live performance data.

LP communication: Automating the creation of clear, data-backed updates for limited partners. AI summarizes portfolio performance, generates tailored responses to common LP questions, and helps teams produce consistent, on-brand reports and materials.

What once took days or weeks of filtering decks, chasing down metrics, and formatting reports now takes minutes. And on top of speed, AI is helping firms become more data-driven, more adaptive, and more aligned with today’s pace of innovation.


Outline

Page 3

Introduction: The AI inflection point in VC

Page 8

Signal-driven sourcing: Find the right companies, faster

Page 14

Sharper diligence: Make more confident investment decisions

Page 20

Portfolio management: Drive outcomes, not just oversight

Page 24

LP fundraising & communication: Win trust with clarity and consistency

Page 28

Looking ahead: The data-driven firm