Routes to Defensibility for your AI Startup – Machine Learnings

One thing that you learn quickly when you enter VC is that investments are about finding moats. I could not find a better way to explain it than paraphrasing Gil Dibner in this post. Why are moats a proxy for the ability to generate profits? Simply, because moats increase a firm's bargaining power with both their suppliers and their customers, helping the firm increase prices and reduce costs in order to generate higher profits. The result of this simple reasoning is that VCs look for companies creating moats.