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Why Most AI Startups Fail to Impress VCsㅣRajeev Dham, Sapphire Ventures

EO10:32Added Aug 31, 2026

Rajeev Dham is a partner at Sapphire Ventures, a growth-stage B2B software investor managing over $10 billion. Sapphire has partnered with companies such as LinkedIn, ExactTarget, DocuSign, and Monday.com.

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Contributed by 刘嘉琪

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  1. 00:00it's true that at least 50% of the
  2. 00:02pitches that we hear are AI every
  3. 00:06vertical is being touched by both
  4. 00:08software and AI but that doesn't mean
  5. 00:10SAS is dead it's sort of why now what's
  6. 00:13different why does the world need
  7. 00:14another X what's the non AI part of your
  8. 00:17product tackle something that's a new
  9. 00:18problem area AI is not alone AI is not a
  10. 00:27differentiator hey I'm reie Dom I'm I am
  11. 00:30a general partner with sapphire Ventures
  12. 00:32Sapphire is a growth stage software B2B
  13. 00:36focused software investor we invest in
  14. 00:38US Europe and Israel we're managing
  15. 00:40over10 billion in capital partnering
  16. 00:43with companies like LinkedIn exact
  17. 00:45target DocuSign looker moft and more
  18. 00:48recently companies like monday.com and
  19. 00:51glean an Enterprise AI company I started
  20. 00:53my career actually not as an investor
  21. 00:56but an investment banker I worked for
  22. 00:58Goldman Sachs actually in their
  23. 01:00financial institutions Investment
  24. 01:01Banking you know your primary role is to
  25. 01:04advise companies on what you think they
  26. 01:07should be doing in response to a
  27. 01:09particular situation whether it be
  28. 01:10evaluating m&a or going public or
  29. 01:14raising some financing that's your job
  30. 01:16as an investment banker But ultimately
  31. 01:18even after a couple of years I realized
  32. 01:20instead of advising these companies what
  33. 01:22would it feel like to actually invest in
  34. 01:24them and then help really advise them
  35. 01:25from the board level having sort of some
  36. 01:27skin in the game and chips on the table
  37. 01:29of investing in companies that you're
  38. 01:30really excited about there's a lot of
  39. 01:32uncertainty but yet it's exciting
  40. 01:34because these are growth markets you're
  41. 01:36you're redefining a market or creating a
  42. 01:38new market feel like I'm a kid in the
  43. 01:40candy store and learning all the time
  44. 01:41from entrepreneurs what they're building
  45. 01:43why they're building it what's on the
  46. 01:45come and it's just really exciting to
  47. 01:49me on the market you want to make sure
  48. 01:51there's a good Market size ideally you
  49. 01:53want to make sure the company is an
  50. 01:55emerging especially at our stage an
  51. 01:56emerging leader or a Next Generation
  52. 01:59leader one thing we see is category
  53. 02:01leaders there's very few markets where
  54. 02:03there's three or four players and
  55. 02:04they're all roughly similar size often
  56. 02:06times the category leader just sucks the
  57. 02:07air uh out of a market because they
  58. 02:10attract the best employees they attract
  59. 02:11the best investors and the most amount
  60. 02:13of capital they get the best customers
  61. 02:15who tell other customers this is the
  62. 02:16only game in town and they're lead just
  63. 02:18compounds over time so we tend to look
  64. 02:20at not just Market size but positioning
  65. 02:22with that market one thing we're looking
  66. 02:24at recently given the saturation in this
  67. 02:27software and SAS space is sort of why
  68. 02:29now what's different okay maybe there's
  69. 02:31a company that has an AI angle and
  70. 02:33that's going to create some accelerated
  71. 02:34sort of growth over the long term but
  72. 02:37what else is there's something
  73. 02:38inflecting or something changing I like
  74. 02:40to say what's the energy in the market
  75. 02:43what is the end velocity in the market
  76. 02:45you may have a big Market size but
  77. 02:46everyone's happy with what they have and
  78. 02:48it's going to be hard to go sell new
  79. 02:50software into it what is the energy of
  80. 02:52adopting a new software and companies
  81. 02:54coming up for Renewal uh in that market
  82. 02:57I think is critical even if your
  83. 02:58business is scaling nicely taking a step
  84. 03:01back and understanding the context in
  85. 03:03the broader Market is there an
  86. 03:04underlying Trend or inflection point or
  87. 03:07a pocket in your competitive space or
  88. 03:09Market space that might be more
  89. 03:11interesting potentially and while your
  90. 03:13company's going nicely now there's
  91. 03:14another company or another pocket of the
  92. 03:17market that can lead to even higher
  93. 03:19growth we call it sort of missing out a
  94. 03:21little bit on the wave I think that's
  95. 03:23critical for some companies which is
  96. 03:25incredibly hard to do when your
  97. 03:26company's performing well and you want
  98. 03:28to just stick to that l but I think it's
  99. 03:30also important to understand that
  100. 03:31broader context and I've seen that
  101. 03:33multiple times where another company has
  102. 03:35a slightly different twist or approach
  103. 03:37is operating in a slightly different
  104. 03:38segment or pocket of the market that has
  105. 03:40more velocity and you can kind of take
  106. 03:42off with the whole the whole prize one
  107. 03:44thing I look for a lot and I talked to
  108. 03:46customers about is velocity what's the
  109. 03:48velocity of product improvements what is
  110. 03:50the velocity of changes that maybe a CEO
  111. 03:53or a c make on the go to market team how
  112. 03:56quickly are those changes made how
  113. 03:57decisive is this management team in
  114. 03:59making changes there there's this saying
  115. 04:02I'm sure someone said it like grow fast
  116. 04:03or die and I think that's kind of true
  117. 04:05in startup world there's something about
  118. 04:08the compounding nature of sort of
  119. 04:09growing fast you almost have to hit that
  120. 04:12escape velocity to make it out as a
  121. 04:14startup and become some sort of
  122. 04:16successful company CU if you don't the
  123. 04:18sort of laws of gravity of private SAS
  124. 04:21just sort of catch up to you and that's
  125. 04:23hard and there's a lot of pressure there
  126. 04:24becomes a lot of competition because
  127. 04:26people see your company growing fast so
  128. 04:29you got to just hit hit that escape
  129. 04:30velocity I think this velocity of
  130. 04:32decision- making that that you do across
  131. 04:35product and go to market in an
  132. 04:38organization what do you do when a
  133. 04:40potential client says we love your
  134. 04:43product but it's way too expensive do
  135. 04:46you give in on discounts right away or
  136. 04:49can you confidently defend your price hi
  137. 04:52I'm Peter on with over 15 years of sales
  138. 04:55experience at companies like Google
  139. 04:58Dropbox and Slack I'm obsessed over how
  140. 05:01to effectively answer questions like
  141. 05:04this in a way that builds trust that's
  142. 05:06why I created Peter on sales school with
  143. 05:09EO to equip startup Founders and sales
  144. 05:12professionals with the modern skills to
  145. 05:15excel in Enterprise B2B sales this
  146. 05:18online course offers real life examples
  147. 05:22and ready to use B2B sales Frameworks
  148. 05:25that you can incorporate immediately
  149. 05:27from crafting the most effective p deck
  150. 05:30to authentic customer Discovery and even
  151. 05:33negotiation I walk through how you could
  152. 05:35do it all and limited to just 10
  153. 05:38students I'm also offering one-on-one
  154. 05:41bespoke feedback on assignments ready to
  155. 05:45learn and grow your sales confidence
  156. 05:47check out the link in the description or
  157. 05:50find me at EO
  158. 05:53School recent marketing conditions are
  159. 05:56interesting is highly saturated with
  160. 05:58hundreds if not thousands I think the
  161. 06:00latest that was of rather large maybe 30
  162. 06:03million to kind of 300 million ARR
  163. 06:06enterprise software assas businesses
  164. 06:08from infrastructures to application
  165. 06:10businesses there's a plethora of them
  166. 06:12that are out there in the private
  167. 06:14markets every single category is
  168. 06:18saturated and also getting funded by the
  169. 06:19way at the very early stages so if
  170. 06:22you're a Founder tackling something I
  171. 06:23would say really push yourself to say
  172. 06:25why does the world need another X or
  173. 06:28tackle something that's a new problem
  174. 06:29area tackle something that's you know
  175. 06:31never been done before or in a vertical
  176. 06:33that hasn't been touched before because
  177. 06:35by the way the other Trend I'm seeing is
  178. 06:36every vertical is being touched by both
  179. 06:39software and AI now ask yourself the why
  180. 06:41now why is this important why does the
  181. 06:44world need another one of these
  182. 06:45companies because ultimately investors
  183. 06:47are looking for that as well what's the
  184. 06:49difference in this narrative it's true
  185. 06:52that at least 50% of the pitches that we
  186. 06:55hear are AI already maybe even 60 70%
  187. 06:59but that doesn't mean SAS is dead to me
  188. 07:02those are still SAS companies AI is not
  189. 07:04alone AI is not a differentiator it may
  190. 07:07use AI as a technology enabler but it's
  191. 07:10not AI is not the product AI is just a
  192. 07:14small kind of piece of the product that
  193. 07:15they're leveraging in really creative
  194. 07:17ways like I said if AI is your full
  195. 07:20product there's probably something wrong
  196. 07:22and we probably won't invest you have to
  197. 07:24have an approach of some non-ai
  198. 07:26technology and Integrations workflows
  199. 07:29that are are different in and around
  200. 07:30that that I think are critical and so
  201. 07:32that's that's what people are looking
  202. 07:36for I invested in monday.com in 200
  203. 07:39maybe 189 what was interesting to me
  204. 07:41about monday.com was you had two
  205. 07:43Founders in Iran and Roy who really just
  206. 07:46had incredible conviction in their own
  207. 07:48Direction and vision uh well one they
  208. 07:51they presented to me and a group on my
  209. 07:54colleagues and it was that night
  210. 07:56actually I booked a red eyee over to Tel
  211. 07:58Aviv flew out there to spend the whole
  212. 08:01day with them and they were shocked and
  213. 08:03surprised there was a plethora of
  214. 08:05companies here in Silicon Valley that
  215. 08:07were attacking the same Market with
  216. 08:09maybe more interesting Silicon Valley
  217. 08:10logos as customers but Monday and Roy
  218. 08:13Iran just had a different way of doing
  219. 08:15things I just saw that they just just
  220. 08:17had true belief in their vision and it
  221. 08:19was very well thought out why they would
  222. 08:21succeed it was that founder sort of
  223. 08:23conviction I saw that really left an
  224. 08:25impression on me that was just really
  225. 08:27unique in our time together I think
  226. 08:29people sometimes don't quite get that
  227. 08:30they think Road stage is just very
  228. 08:32formulaic everything's sort of working
  229. 08:33and you price the company and you try to
  230. 08:35get money in there's still a lot that
  231. 08:37has to work out even at later stages and
  232. 08:39at monday.com there was a lot that still
  233. 08:41had to work out but there's something
  234. 08:42that excited me there's something that
  235. 08:44stuck with me about that company and
  236. 08:46about that meeting that leaves me that
  237. 08:48energized to sleep 3 four hours a night
  238. 08:50for multiple nights and to me that's now
  239. 08:52become a signal I thought it was used to
  240. 08:54be a flaw maybe it still is but now it's
  241. 08:56a signal to me and that happened with
  242. 08:58Monday and that happened with many other
  243. 08:59other businesses since our business is
  244. 09:01pretty simple in some ways it's
  245. 09:02investing in people you like and you
  246. 09:04admire that just move you in some way I
  247. 09:07think every investor needs to adapt to
  248. 09:11the entrepreneur and founder that
  249. 09:13they're working with I think if if a VC
  250. 09:16is needing to operate the business
  251. 09:18that's not really the entrepreneur that
  252. 09:19a VC even wants to back in the first
  253. 09:21place we want to back an entrepreneur
  254. 09:23that says kind of get out of my way I
  255. 09:25know what I'm doing here but hey can you
  256. 09:27tell me how much I should compensate
  257. 09:28this sales person and can you tell me
  258. 09:30how many companies of yours operates in
  259. 09:32three different distinct go to market
  260. 09:34segments are there metrics or kpis can
  261. 09:36you introduce me to a CTO and your
  262. 09:37portfolio can you sit down with me talk
  263. 09:39about usage based pricing models versus
  264. 09:41seat-based pricing models and how that's
  265. 09:42evolving across your portfolio or what
  266. 09:45you think how would you think it appli
  267. 09:46those are the questions that VC should
  268. 09:48be there to answer versus going in
  269. 09:49deeply and really trying to operate the
  270. 09:51business dictate strategy too deeply uh
  271. 09:55themselves so again I try to adapt to
  272. 09:56the company and situation one thing I've
  273. 09:58realized from glean to Mondays an
  274. 10:01entrepreneur really wants to to walk
  275. 10:03with you similarly as an investor and a
  276. 10:05potential board member and just just
  277. 10:07ensure that you really are bought in to
  278. 10:10their Vision have true passion and
  279. 10:13conviction for their companies I think
  280. 10:15that's still um Paramount in terms of
  281. 10:17you know winning a deal and figuring out
  282. 10:19what you want to invest in