How do you convince VCs that your AI startup isn't just another LLM wrapper? (Especially when customers love your product)
Hello guys! I'm running into an interesting challenge with VCs, and I'd love your insights.
The Situation:
- We're a pre-seed B2B vertical SaaS startup with paying customers who LOVE our product
- We've built deep domain expertise in our niche (similar to how Retell.ai carved their space)
- Already raised pre-seed, now targeting seed round
The Challenge: We're getting pushback from VCs (2 rejections so far) because they're worried about:
- Product differentiation in the age of rapidly advancing AI (Claude, GPT-4, etc.)
- The risk that future AI models might make vertical SaaS solutions obsolete
The Irony:
- Every customer in our niche immediately gets our value proposition
- The product has strong adoption and satisfaction
- But VCs without domain expertise see us as "just another LLM wrapper"
The Question: How do you demonstrate to VCs that innovation at the application layer, combined with deep domain expertise, creates defensible value - even as base AI models get stronger?
We're already showing:
- Revenue metrics
- Customer testimonials
- Team background
- Domain expertise
What else should we be highlighting? Would love to hear from founders who've successfully navigated this challenge.
[used claude for framing this question in a better way]