I recently chaired a panel on “Investing in AI-Native Companies”, hosted by HBS Club of NY and sponsored by Paul Hastings. Our speakers were:
- Zane Lackey, General Partner, Andreessen Horowitz
- Jason Freedman, Cofounder, Orange Collective
- J.P. Mohler, co-founder, General Legal, AI-native law firm
- Moderator: Sam Waxman, Partner, Paul Hastings (and our generous host!)
Here’s a summary of what we discussed:
- Defining “AI-Native”: The panelists defined an AI-native company not by its founding date, but by its core architecture. An AI-native firm is designed from the ground up—rethinking business processes and human roles—with the assumption that AI performs the bulk of the work while humans act as supervisors.
- The Power of the Small Team: AI-native companies are achieving unprecedented efficiency. Panelists noted that modern startups are scaling with significantly fewer employees (e.g., five engineers instead of fifty) by heavily investing in AI tokens and agents rather than massive headcount.
- The “Human” Moat: Despite the technological shift, the “moat” (competitive advantage) for early-stage investors remains the formidable founder. In a rapidly changing tool environment, the ability of a founder to be a “thoughtful thinker” and a relentless learner is the most predictive metric for success.
- Shifting Jobs & Workflows: The traditional “analyst” role is being disrupted. AI agents are increasingly handling complex, multi-step tasks like drafting investment memos or performing legal research. The value is shifting from those who can execute a known process to those who can effectively prompt and manage AI agents.
- Investment Dynamics: Investment velocity is increasing. AI-native companies are showing median week-over-week revenue growth of 14%, nearly triple that of the previous generation of Y Combinator startups.
