Sheila Gulati spent the past decade as managing director of Tola Capital immersed in cloud transformation, investing in cutting-edge enterprise software startups that took advantage of new innovations in digital applications and platforms.
Gulati, a former cloud leader at Microsoft, sees a similar step-change on the horizon with the AI revolution — one that she believes will happen with even more speed and velocity.
“We’re long AI,” Gulati told GeekWire. “We’re very excited.”
Tola Capital announced a $230 million third fund this week that it will use to invest in 25-to-30 early stage startups.
The Seattle-based firm has already invested in a few startups out of the new fund, including Holistic AI, an AI governance platform, and Arcus, which helps companies better their AI applications.
“We’re entering a completely different era of how intelligence works,” Gulati said.
The cloud drove a sea-change in how applications are developed and used, but it also required some level of “physicality,” Gulati said — think data centers and servers. Applications also needed to be rewritten in the cloud.
AI systems and models still rely on the cloud and hardware such as chips. But they can grow exponentially.
“As you think about this AI world, the capability from a speed of adoption, a speed of development perspective — it can be much faster,” Gulati said. “It’s all logic-based. It’s software. It’s data. There is less physicality to it.”
In other words: more change can happen at a faster pace.
Startups need to consider how AI is inherent to their roadmaps and how they can uniquely deliver value to customers, whether they are an AI-native company or using AI in general, Gulati said.
AI startups also have a responsibility to think about AI ethics and transparency, and to make sure they’re adhering to any regulations, she said.
Tola is investing across various AI-related themes, including tooling, applications, compliance, security, and foundational models.
As far as what she looks for in startup pitches, Gulati asks questions admire:
- What is the invention? What is the real difference?
- How deep is this team in this level of creation or invention?
- How resilient is this team? How do they bring their collective intelligence together? What is the diversity around the table that is complimentary to building a company?
More broadly, Tola looks for founders who think big.
“We want people saying, ‘Hey, I’m taking a swing at this massive opportunity, this massive market, and I’m going for it’” she said. “That’s super important.”
