This Rising VC Says the Smartest Founders Are Chasing Unsexy Ideas in the AI Era

Venture capital investor Will McKelvey spoke with Inc. about how he’s angling to capitalize on AI’s second-order effects.

BY BRIAN CONTRERAS, STAFF WRITER @_B_CONTRERAS_

Illustration: Inc.; Photos: Courtesy Subject, Getty Images

In 2017, Will McKelvey secured a job working for outspoken Silicon Valley congressman Ro Khanna, eventually becoming the representative’s economic and healthcare policy advisor. In the process, McKelvey’s eyes were opened to the power and intrigue of venture capital.

“Capitalism is ultimately moving money around, and investing in startups is the most interesting money you can move,” McKelvey says.

So in 2021 McKelvey left Capitol Hill for business school at the University of California, Berkeley, where he raised a small angel fund with some friends. Two years after that he decided it was time to join a more established investment firm; his search landed him on the other side of the country at Lerer Hippeau, a New York City-based VC firm whose past investments include Allbirds, Axios, BarkBox, BuzzFeed, Casper, Cotopaxi, Everlane, Glossier, GoodRx, MakerBot, Resy, Soylent, Venmo and Warby Parker.

McKelvey sat down with Inc. in the wake of his recent promotion to principal to discuss what he looks for in his investments and why, in an era of AI disruption, he sees religion and education as two key sectors to watch. This interview has been lightly edited for length and clarity.

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Being a generalist investor, how do you go about narrowing down your wide array of potential investment opportunities?

I think about narrowing the aperture in a couple of ways. The first is that we have been based in New York for 16 years; the full team is based here. Where we see a real right to win is when founders are coming to New York for the first time, or building companies where they’ll need to sell into New York’s customer set, or if their founders are fully setting up shop in New York City. I try to be every founder’s first call when they come to the city.

The other way is through deep relationships. Ultimately there is a 10-to-12 year commitment you’re making when you back a founder at seed or pre-seed, so when I meet a founder, I want to build a relationship over a long period of time—which means maybe not being a fund that’s sending out 1,000 cold emails a week, but instead doubling down on the people who I think are special talents, even when there isn’t a “deal” to be done.

What do you think sets the New York venture capital scene apart from Silicon Valley?

If you are a company that is selling technology to technology startups, you should build your company in San Francisco. I’m not going to deny that. But I think that if your company is selling technology to the vast ecosystem of other businesses, or if you are building a product for hundreds of millions of consumers, there’s no better place to do that than New York. A lot of the infrastructural work of the 2000s was built in San Francisco. Then, in the 2010s, people started saying, “Let’s apply this technology to the companies in the world that make these markets really big and really interesting.” [Amid the AI boom] I think that you will see a huge surge in growth of startups that are selling to enterprises choosing to build in New York City because they want to be close to the customer.

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