Episode summary
Standard Metrics CEO on AI, Venture Capital & the Future of Investing
How I Invest With David Weisburd
· · 59 min · Hosts: David Weisburd · Guests: John Melas-Kyriazi
Summary
AI is already changing how venture firms work across the full investing cycle, from sourcing and diligence to portfolio management and back-office operations. John Melas-Kyriazi says the biggest shift is still grassroots: individual investors are using LLMs to build dossiers, get smart quickly on unfamiliar technical areas, and combine internal notes, web research, and specialized data products into richer meeting prep.
He argues that firms are starting to turn those ad hoc workflows into repeatable processes, especially when an LLM can red team an investment memo or when MCPs make it easier for AI tools to interact with firm data and software. Standard Metrics sees firms using a mix of Claude, ChatGPT, Perplexity, Gemini, and custom workflows, but John says culture matters more than the specific tool stack if a firm wants to become AI-native.
The conversation also focuses on build-versus-buy decisions. John says firms should build for narrow internal workflows, but should buy software when it involves outside users, compliance, audit trails, and multiplayer coordination with portfolio companies or auditors. Across more than 12,000 portfolio companies, he says the fastest-growing AI companies are now outperforming non-AI companies on revenue per employee at the top end, and that human judgment, founder evaluation, and post-investment support will become even more valuable as more routine work gets automated.
Key takeaways
- John Melas-Kyriazi says AI is already being used across sourcing, diligence, portfolio management, and back office work, but mostly through grassroots experimentation rather than firm-wide mandates.
- He says the most common AI use case at venture firms is deep research before meetings, using internal notes, internet sources, and curated data products to build dossiers on founders and companies.
- John says MCPs matter because they let a user stay in prompting mode while an AI tool makes the underlying API calls and builds reports across firm systems.
- He argues venture firms should often build internal, single-player tools but buy software for multiplayer workflows involving portfolio companies, auditors, security, and compliance.
- Standard Metrics’ data suggests the fastest-growing AI companies are now outperforming non-AI companies on revenue per employee at the top end, according to John.
- John says the scarce resource in venture is shifting toward judgment, founder evaluation, and value-add support, not raw data gathering.
Notable quotes
“We're seeing people experiment with new workflows across the entire um life cycle of investing”
“LLMs are really good at helping people get up to speed in new technical areas”
“once an investment memo was published by someone in the firm they would effectively go red team that investment memo”
“MCP allows you to do is a layer of abstraction above that, where you could go to Claude and you could say, "Hey, Claude, build me a report on this company”
“If you wanted to build an AI-native firm, I think you kind of need to start with people who are AI-native and/or people who want to become AI-native”
How the episode opens
Everyone says AI is transforming companies, but you think AI is going to transform venture capital itself. Why?
We're seeing people experiment with new workflows across the entire um life cycle of investing from the you know research, sourcing, kind of the earliest stages of identifying companies to invest in, uh diligence, uh and then all the way through to portfolio management and back office. Um there have been some companies that have been built to assist with various parts of that, but a lot of it right now is grassroots. And so it's just really interesting.
Like every time I meet an investor, I'll ask them, "Hey, what are you using AI for? And often times you get a different answer every time. It's I think it's actually a really exciting time uh to be an investor because people are kind of redefining what it means to be an investor in the in the age of AI and trying lots of new things.
What's the most effective way that you know that venture firms are using AI today?
A firm is going to meet with an entrepreneur. It's a perfect kind of deep research type use case of, "Hey, we're going to sit down with this entrepreneur, put together a full dossier on everything that this person's ever worked on, built, professional history. Um go do research on all of the things that have ever been published about his or her company.
Another one that that we see a lot is that many firms are generalist firms and or people at the firms cover many different categories. It's pretty rare these days that you'll have someone who's, you know, just focusing on, you know, semiconductors or just focusing on fintech. Of course it does occur.
Um but a lot of people are dabbling in a number of different areas and um forced to go uh in many cases a mile wide and an inch deep.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai in venture capital
- ai-native investing workflows
- build vs buy software
- investment memo red teaming
- mcp rise
Companies and tickers mentioned
- Standard Metrics
Watch the episode
Watch “Standard Metrics CEO on AI, Venture Capital & the Future of Investing” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
