Are investors blindly funding any company which has AI or just the term AI in'em
is this the same situation like the dot com boom where investors were pouring tons of money just because it being a internet company. also i wasn't born until 4 years after the dot com bubble so could consider to explain how it really was and if you were a part of it or right now if you are a part of any ai company
(
6 comments
| 3 points
| on HN
)
1. Raise a lot of money from LPs (Rich People or Institutions).
2. Get ~3% out of the fund for operations and then for every successful exit.
3. Fund startups/industries that others are investing into to create a cycle.
Now what happens when all the startups are doing bad? Can't deploy capital? You can't return the cash to LPs saying "OOPs didn't find best startups to fund"
Instead you go, "See everyone is investing in AI, so we are also doing it!", LPs happy to be part of a trend and thinks themselves smart while you raise more for your fund. :)