Artificial intelligence is "a core focus" for Dana Settle, co-founder of VC firm Greycroft, but it's not the only area of opportunity.
"We are big believers in AI," Settle said at the 2023 Milken Global Conference (video above). "I think it's an inevitability. So we're looking at both companies that are native AI companies as well as companies that have embraced AI and are really rolling it out as a core part of their product."
Still, AI won't change absolutely everything. There will still be a place for tactile consumer goods like skin care, cosmetics, and packaged foods, according to Settle.
"There are areas that won't be touched by AI, at least not in their core, and that's consumer products," she said. "So long as humans continue to consume things, which we will, there will be demand for consumer products, and so we really believe there's opportunity there as well."
For those companies, Settle added, "their processes around marketing and distribution and production will be improved with AI, but the products will still be sold."
Greycroft, which was founded in 2006, has invested in and exited some of tech's most notable names, including Bumble (BMBL), The RealReal (REAL), and Venmo, which was acquired by online payments company Braintree in 2012 for $26.2 million. By 2013, Braintree, which Greycroft also invested in, was sold to eBay (EBAY) and PayPal (PYPL) — one company at the time — for $800 million.
'A real wake-up call' for VC
Today, Greycroft manages more than $2 billion in capital and just finished raising two funds that shake out to nearly $1 billion between them.
"The timing really has worked out terrifically, and having a significant pool of capital in the market today is incredible because the market's contracted so much," Settle said, adding that this round of fundraising included existing and new limited partners.
It was a heavy lift in hectic times. In addition to the difficult macroeconomic environment, Greycroft's portfolio was also substantially exposed to Silicon Valley Bank, which collapsed in March. As that was happening, Settle, her co-founders, and team sprang into action, focusing on gathering information from their portfolio companies in that first 72 hours.
"We really saw it all unfolding kind of in real-time, and we had a huge number of companies that banked with SVB," she told Yahoo Finance. "So what we were trying to do was really just triage. All of our partners, each person, sort of took their portfolio companies, went into action, and figured out what needed to be done."
Settle said she and her team got "pretty granular" in the questions they asked when reaching out to companies.
"I think in those times you have to be very proactive," she said. "People needed to hear from us one-on-one."
Even as it became clear that the government would step in, the reality was that the collapse of SVB was just the beginning of a due diligence process that would last weeks, and it reinforced the importance of stability.
"On Monday, obviously, a big sigh of relief when the government stepped in, but the triage continued," Settle added. "I think it was a real wake-up call to make sure that companies were stable and had redundancy built in."