Venture capital firms are increasingly adopting artificial intelligence (AI) and automation to streamline their internal operations, mirroring practices they often advocate to their portfolio companies. From deal sourcing to portfolio management, VC firms are letting generative AI (GenAI) and automation tools handle a substantial portion of routine work, freeing up time for higher-order decision-making and deeper engagement with startups.
Deeptech-focused Auxano Capital has already automated about 30-40% of its recurring tasks, while IvyCap Ventures has set an ambitious goal of automating 60% of its end-to-end deal flow, investor management and portfolio oversight by the end of the year.
The push towards automation is driven by the growing complexity and volume of work that venture capitalists manage, particularly the need to sift through a high number of startup pitches and investment opportunities.
The use of large language models (LLMs) and GenAI is proving transformative across a spectrum of functions. These include evaluating pitch decks, conducting initial sector research, generating content, performing data entry, managing communications, and even carrying out preliminary due diligence.
Good Capital, an investor in startups such as Meesho, Apnibus, Solar Square and Orange Health, has taken automation further. The firm estimates that 70-80% of its internal tasks are now automated. It uses tools like Airtable, Zapier and Paperform to automate follow-ups with portfolio firms and capture information across WhatsApp, email, voice notes and links, all of which are centralised and updated in real time.
“Automation isn’t just a productivity hack for us, it’s core to how we scale good judgement,” said Arjun Malhotra, general partner at Good Capital, adding: “It speeds up screening and improves accuracy. An AI prompt handles first-level triage of inbound deals based on predefined criteria, narrowing down what our team needs to review.”
According to Malhotra, action items and the next steps are automatically tagged and assigned, ensuring a seamless workflow and high deal velocity without compromising on the quality of evaluation.
For many firms, automation is proving especially effective in the heavy-lifting stages of deal sourcing and initial analysis. “As the volume of deals is high, manual evaluation is tough. AI makes it easy to shortlist. We have created the initial filters which automation takes care of,” said Vikram Gupta, founder and managing partner at IvyCap Ventures. The firm has even appointed a chief technology officer to lead its tech-driven transformation.
Somshubhro Pal Choudhury, co-founder and partner at Bharat Innovation Fund, described the process as AI “sifting through thousands of startups” to identify those that align with a fund’s investment thesis, dramatically improving the ability to detect promising opportunities early.
With AI handling the routine, analysts and partners can now focus on more strategic aspects of investing. This includes in-depth sector analysis, identifying emerging trends and building stronger relationships with startup founders. These softer elements, such as founder vision, chemistry, and team dynamics, are critical in early-stage investing, where hard data is often limited. Additionally, AI tools help with faster review of legal documents and can quickly extract important insights from lengthy filings.
Despite these advances, venture capitalists believe that fully automated dealmaking remains a few years away. “I believe investors would always be needed to make the final judgement call, as a lot of imagination is required to understand how a startup or sector could evolve over 5-7 years. I doubt if this part could be automated,” said Rohit Krishna, general partner at WEH Ventures, which has achieved around 25% automation at the fund level.
The consensus across firms is that the human touch in VC decision-making remains irreplaceable for now. “Perhaps in the immediate future, as AI matures and regulations catch up, full automation may happen, but trust and human judgement would still be vital,” said Brijesh Damodaran Nair, managing partner at Auxano Capital.
VCs are also proactively encouraging AI adoption in their portfolio companies. While automation levels differ based on sector and maturity, firms are urging startups to target automation of 40-50% of their routine operations by FY26.
