The founder of an AI startup asked VCs to pay him $100 to meet him.

Serious candidates only.
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  • Dan Seroker, founder of AI startup Rewind, is asking investors to pay if they want to meet.
  • He’s charging $100 per booking in an effort to save his most valuable resource: time.
  • It’s a sign that the fruity AI startup market is headed for insanity.

The venture capital industry has mostly been a tale of woe over the past year, with thousands of startups struggling to raise money and many closing.

For some lucky founders, though, the market is just as boisterous as ever, and is re-entering the realm of insanity.

A few days ago, startup founder Dan Seroker set his sights on meeting new investors. He expected to meet so many VCs claiming to meet that the entrepreneur decided to hit the ground running and make some money (for charity) doing it.

“We can’t meet everyone so to make sure you’re serious and it’s a good use of our time, we require a $100 payment to meet. First come, first serve,” he said. Tweeted on Thursday.

More than a thousand investors

Not all founders can do this, to be sure. Based on how its previous fundraiser went, Sarvkar was already prepared for a flood of Zoom calls.

Last spring, the founder shared a link to his startup Rewind with a form so anyone could make an investment offer. After a few weeks, More than a thousand investors expressed interest.

Sarokar closed the process with 170 bids. It raised $12 million for Rewind at a cost of $350 million.

Seroker told Business Insider this week that he is not actively fundraising. He explained that Rewind has enough cash in the bank from this last round to grow and operate for another four years.

Rather, he is now meeting with investors to build relationships over time.

“This company is my life’s work,” he said in a direct message. “That means I’ll be working with these investors for at least a decade or more. I want to make sure it’s the right long-term fit, and so just one or two. Getting to know them is more important to me than meetings.”

Rewind’s digital assistant records everything a person does on their computer and makes it searchable. Recordings are stored locally on an individual’s computer to minimize privacy concerns. The service has a free tier and a $19 monthly subscription that unlocks more robust features.

Andreessen came out of Rewind Stealth in late 2022 with millions from Horowitz, First Round Capital and others. Sarokar says his startup now has 22 employees.

The hottest companies are getting funded, while the rest are fighting for scraps

VCs falling over themselves to meet startup founders — and paying for the privilege — is a sign that at least parts of the startup funding environment have returned to boom times.

However, charging investors can be at odds with building healthy, long-lasting partnerships with investors.

While asking for cash is “an effective way of knowing who was serious and who wasn’t,” the experiment itself has the effect of weeding out key investors, Seroker said.

“I also want investors who don’t have big egos and believe in our company enough that they’re willing to swallow their ego a little bit and be happy to pay to meet,” They said. “Most investors believe that entrepreneurs should kiss their ring. It selects for those without egos.”

This is just one example of the extreme divide between the haves and have-nots in Silicon Valley right now.

Over the past two years, a large number of startups have avoided death by cutting costs and headcount. But because they amassed pools of cheap money early in the pandemic, many will be forced to go to the markets for capital this year.

Not all of them will succeed. The same lack of capital for startups is hurting funding. Last year, the industry closed 474 funds, the lowest number since the tech bull run began in 2013, according to data from PitchBook. Deposits are expected to decline from $173 billion to about $70 billion in 2022.

Perplexity is raising additional funding just months after closing $74 million from investors.
Paolo Gonchar/Getty Images

Investors have told BI that they are seeing more binary outcomes as they spread less capital across fewer companies.

“When deals are hot, there’s a lot of interest,” Ben Lear, managing partner of Lear Hipo, an early-stage venture firm, told Business Insider’s Ben Bergman late last year. “But if you’re on the wrong side of it, not a cent.”

Investors are still flocking to artificial intelligence-powered software, apps and infrastructure, says Dick Costello, the former chief executive of Twitter and now managing partner of 01 Advisors, a start-up firm.

This week, BI reported that Perplexity, a startup working on Google with a smarter search engine, is raising additional funding at a significantly higher valuation, just months after it took 74 from investors. Millions of dollars were closed.

The funding bonanza in artificial intelligence shows no sign of slowing down. Bushra And Open AI New rounds closed at face-melting prices last month. Employees at Google, Nvidia, and OpenAI are striking out on their own and raising cash for new startups.

“Even if you’re going to invest in early development, you have to see them when they’re just starting out and get to know the team and get them to know you — because those things are preempted. ” said Costello. “If you’re not there before you pick up, you’re not part of the conversation.”

Siroker is counting on investors to do just that. As of Friday afternoon, he said he had raised $900 from nine investors willing to pay to meet.

Although one person who responded to Sarokhar’s tweet suggested that he mark the proceeds from the meetings as income for his business, Sarokhar told BI that he donated the money to the Boys and Girls Club and Blood. Intends to Do, a non-profit organization that teaches students how to become entrepreneurs.

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