VentureBeat October 24, 2021
VCs have a detailed playbook for investing in software-as-a-service (SaaS) companies that has served them well in recent years. Successful SaaS businesses provide predictable, recurring revenue that can be grown by acquiring more subscriptions at little additional cost, making them an attractive investment.
But the lessons that VCs have learned from their SaaS investments turn out not to be applicable to the world of artificial intelligence. AI companies follow a very different trajectory from SaaS providers, and the old rules simply aren’t valid.
Here are four things VCs get wrong about AI because of their past success investing in SaaS:
1. ARR growth is not the best indicator of long-term success in AI
Venture capitalists continue to pour money into...
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