Sarah Smith launches $16M fund, says AI can ‘unlock’ so much for solo GPs like herself
Sarah Smith, the visionary founder and managing partner of the eponymous Sarah Smith Fund, has officially announced the final closing of an impressive $16 million Fund I. This significant milestone underscores a growing trend in venture capital, where innovation and efficiency are being redefined by cutting-edge Artificial Intelligence.
Having launched her fund in 2022 after a distinguished seven-year tenure as an investor with Bain Capital Ventures, Smith operates as a solo General Partner (GP). She expressed profound optimism about the transformative power of AI for firms like hers, especially for solo and next-generation venture capitalists. “I’m stunned by what AI can unlock,” Smith stated. “I can’t imagine doing venture any other way now.” Her conviction is clear: while company building remains a team effort, early-stage investing, she believes, thrives best under the agile decision-making of a solo GP.
One of the key advantages Smith highlights is the ability to make rapid decisions, unburdened by the lengthy committee approvals often associated with larger firms. Her strategic adoption of AI has been instrumental in streamlining processes and enhancing efficiency throughout her investment journey. “Every day I’m dreaming of more ways to support my founders, combining my experience and network with AI,” she elaborated.
Smith provided a compelling example of AI’s tangible impact: “Just last week, I led a values articulation project for one of my founders. It took me two to three hours of time when it previously would have taken 20.” This dramatic reduction in time, she asserts, showcases the power of an AI-native firm. “When you have an AI-native firm that can deliver 10x value in 1/10 of the time, you can scale up a large portfolio with just one person.”
Fund I, which was raised over the course of a year following a successful $3 million rolling fund, aims to invest in approximately 50 companies. To date, 17 companies have already received backing, with an average check size of $250,000. The fund has attracted notable limited partners, including Pear VC, Ulu Ventures, and Verdis Investment Management, signaling strong confidence in Smith’s unique, AI-driven approach.
A strategic focus for Fund I is startups emerging from the vibrant Stanford ecosystem. Smith, herself an alumna of the university, supports this geographical concentration with compelling research. She cited research by Ilya Strebulaev, which indicates that Stanford has produced more unicorns and generated greater exit value than any other university globally, with 11% of unicorn founders having ties to Stanford. Smith emphasizes her dedication to the Stanford campus, a deliberate contrast to many legacy Sand Hill firms that predominantly operate further north in San Francisco.
