Predicting Success in AI Startups: A Data-Driven Investment Analysis

This version 1 research applies machine learning to identify high-potential AI startups from 2017-2019, yielding significant insights for investment decision-making.

Project Framework

We developed a machine learning methodology to identify promising AI ventures across two cohorts: 2017-2018 (475 companies) and 2019 (329 companies). 

Our approach incorporated:

  • Six predictive variables: Industries, Company Description, Founder Biography, Founder Gender, Location, and Educational Background

  • A dual-model ensemble combining Random Forest and XGBoost algorithms

  • Advanced text vectorization for unstructured data

Portfolio Performance

Our model selected 15 companies across both time periods:

2017-2018 Selections (10): Jerry, Health Note, Cylera, Deep Cognition, Determined AI, NoTraffic, MovieBot, SupplyHive, Kami Vision, Rowzzy

2019 Selections (5): Eleos Health, Anyscale, Baseten, Anvilogic, Fairmatic

Current Performance:

  • 6 companies (40%) achieved valuations exceeding $500M

  • 3 companies (20%) demonstrate strong growth trajectories

  • 3 companies (20%) show steady growth

  • 3 companies (20%) have ceased operations

This 40% high-performer rate significantly outperforms typical venture capital success rates of 10-20%, while the 20% failure rate is substantially lower than industry averages of 75%. This do not factoring in various constraints of real investing.

Key Investment Domains

Four predominant themes emerged:

  1. Enterprise AI Infrastructure (Determined AI, Anyscale)

  2. Healthcare AI Applications (Eleos Health, Health Note)

  3. Security Solutions (Cylera, Anvilogic)

  4. Financial Technology (Jerry, Fairmatic)

Investment Implications

Successful AI ventures consistently demonstrate:

  • Enterprise-focused solutions with clear value propositions

  • Technical excellence within founding teams

  • Strategic presence in major technology ecosystems

While our model demonstrates strong predictive capability, it remains a decision support tool rather than a replacement for comprehensive due diligence.

We will continue to do more and larger permutations in AI and work larger geographies and sectors and publish the results once they are done.


Disclaimer: This analysis is for educational purposes only. Past performance does not guarantee future outcomes.

Rise of the Tinkerer VCs

The venture capital landscape in 2025 is evolving rapidly. I think the days of purely financial-focused "AUM" investors are slowly fading, replaced by a new breed of venture capitalist: the tinkerer VC. These investors don’t just write checks—they think like and are builders, actively engaging with founders and creating value through technical expertise, product strategy, and operational support.

This shift is particularly visible in early-stage venture capital, where founders demand more from their investors. Economic pressures and increasingly complex technologies are forcing VCs to rethink their approach. In this environment, the tinkerer VC—someone who understands startup engineering, product development, and go-to-market strategies—is becoming indispensable.

Capital is abundant, but value-added support is rare. They want partners who can help them build—not just financially, but technically. This is especially true for startups in fields like AI, biotech, or climate tech. Founders need investors who understand their technology deeply and can contribute to solving technical challenges or scaling efforts. A VC who can’t engage meaningfully with the latest technologies risks being left behind.

The market correction of 2022–24 shifted the focus from growth-at-all-costs to capital efficiency and sustainable growth. Startups now need to do more with less funding, which opens the door for tinkerer VCs who can help optimize operations and refine strategies. Investors who understand the mechanics of building—from engineering to execution—are better equipped to guide startups through these challenges.

Specialization is becoming essential in venture capital. Generalist investors struggle to compete when technical fluency is required to evaluate opportunities or support founders meaningfully. Tinkerer VCs—often with backgrounds in engineering or product development—stand out in sectors like generative AI or climate tech because they can dive deep into technical challenges and provide actionable advice.

If you’re an investor—especially in early-stage—it’s time to adapt to this new reality. Technical savvy isn’t optional anymore; it’s a competitive advantage that sets you apart in a crowded field. 

Here’s how you can evolve:

1. Learn Startup Engineering
Understand how startups build products by learning the fundamentals of software engineering, product design, and system architecture. Take coding courses, experiment with building projects yourself, or work with the latest technologies like generative AI tools. Hands-on experience will give you insights that spreadsheets never will.

2. Build Things Yourself
Invest time in tinkering—whether it’s coding apps, experimenting with hardware, or prototyping solutions using cutting-edge tools like GPT APIs or cloud platforms like AWS and systems programming like CUDA. Founders respect investors who understand what it takes to build something from scratch.

3. Specialize Where You Can Add Value
Focus on sectors where you can develop deep expertise—whether it’s AI, climate tech, fintech, or another domain—and commit to understanding those industries inside out. Specialization improves your ability to evaluate opportunities and enhances your reputation among founders.

The venture capital industry is changing—and tinkerer VCs are leading the way forward in 2025 and beyond. Investors who embrace technical fluency and hands-on engagement will outperform those stuck in traditional financial models.

The Future Belongs to the Bold: Backing Founders Who Dare to Dream Big

Investing in Southeast Asia for many years now, I’ve witnessed cycles of growth, correction, and reinvention. Yet, the current moment feels uniquely challenging—and transformative. The sectors emerging at the forefront for the next few years—B2B and deep tech—are ones where many of us have struggled to find consistent success over the last decade, especially compared to B2C and fintech. At the same time, our fund sizes have grown larger than ever, but the market size we operate in hasn’t proportionally expanded. This mismatch creates a tension that demands we rethink how we approach risk, ambition, and execution.

Since the 2022-2023 crash, large VC funds have increasingly gravitated toward safer, private-equity-like deals while becoming more multi-stage. It’s understandable; preserving capital feels prudent in uncertain times. But playing it safe won’t build the future. We cannot afford to give up on audacious founders—those who dare to think big and aim for transformative impact. These are the people who will unlock new markets, redefine industries, and create outsized returns—not just for investors but for society as a whole.

To thrive in this new era, we must retool and reinvent ourselves as investors. This means recalibrating how we assess risk, developing deeper expertise in emerging sectors, and being smarter and more calculated in our bets (keeping Power Law Distribution firmly in mind). It’s not about reckless optimism; it’s about supporting bold ideas with discipline and clarity.

This is a call to action: let’s not retreat into comfort zones or limit our vision. Let’s figure out what needs to change—within ourselves, our teams, our ecosystems, our founders, and our strategies—and make those changes happen. The future belongs to those willing to take calculated risks on founders with big dreams. Let’s ensure we’re part of building that future.

Unlocking the Code of Venture Capital Success: Revelations from the Top VCs Globally (Midas List update)


As we journey through the fascinating world of top venture capitalists, we uncover a treasure trove of insights that shed light on the educational backgrounds, career paths, and the shifts in the demographic landscape of the industry. This data-driven exploration aims to provide a comprehensive view for limited partners, aspiring VCs, and students, as we delve into what makes these venture capitalists stand out.


Key Insights and Importance of Education


Top Undergraduate Universities


- Stanford University (13% of VCs)

- Harvard University (8%)

- MIT (7%)

- University of Pennsylvania (4%)

- Yale University (3%)


Stanford's dominance is unmistakable, emphasizing its pivotal role in the tech VC landscape.


Top Undergraduate Majors


- Engineering, Computer Science, and Related Disciplines (30%)

- Economics (17%)

- Business or Management (11%)

- Public Policy, Political Science, or Government (8%)

- Mathematics & Applied Mathematics (6%)


The importance of a STEM background remains evident, but there's a significant representation of business-related studies, reflecting the need for a multifaceted skill set.


Graduate Education


Graduate Degrees: 67% of VCs hold graduate degrees from esteemed institutions:

  - Stanford GSB (14%)

  - Harvard Business School (12%)

  - Columbia Business School (3%)

  - Wharton School, University of Pennsylvania (3%)

  - MIT Sloan School of Management (2%)


This trend speaks to the value placed on continuous learning and specialization in fields like business, finance, and technology.


Entrée into the Venture Capital Arena


- Direct Entry: 23% of VCs under 45 started their careers directly in VC, compared to only 13% for those over 45. This early specialization trend highlights a demand for nuanced expertise at the outset of one's career.


A New Generation's Rise


- Technical Backgrounds: 38% of VCs under 45 vs. 25% over 45, indicating an industry shift toward tech-savvy investors.

- Investment Banking: Investment banking serves as an initial career path for 45% of young VCs vs. 30% of their older counterparts, showcasing the sector's increasing integration with venture capital.


Experience and Impact in VC


- Founder Experience: 29% of VCs under 45 were founders, in contrast to 37% for those over 45, signifying a slower but still prevalent trend of operational experience.

- Analytical Backgrounds: Both cohorts show high levels of analytical savviness, with older VCs boasting experience in diverse roles like sales, strategic planning, and product management.


Diversifying Demographics


- Female Representation: A gradual increase in the younger cohort to 12% vs. 8% for older VCs, signaling progress in industry diversity.

- International Backgrounds: 36% of top VCs have international roots, underlining the global nature of venture capital, with significant representation from China, India, and Europe.


Key Insights for Stakeholders


For Limited Partners


- Invest in funds with multi-generational VCs to leverage industry trends and seasoned experience.

- Recognize the evolution in career paths, with younger VCs more likely to have an analytical or entrepreneurial background.


For Aspiring VCs and Students


- While technical education is advantageous, business and economic knowledge is equally important for understanding the broader market dynamics.

- Seek internships in investment banking, consulting, sales, or product management for hands-on experience.


Advances in Venture Investment Trends


- Industry Evolution: The venture capital landscape now leans towards sector specialization, with notable increases in tech-focused investments (most recently in AI).

- Diversification: Despite incremental progress in gender diversity, the industry recognizes the need for further internationalization and broader inclusivity.


In conclusion, the profile of top venture capitalists has evolved, adapting to changing industry needs, educational trends, and innovation. The combination of technical knowledge, diverse professional backgrounds, and a nuanced understanding of market dynamics remains key to navigating the entrepreneurial journey and gaining success in venture capital.