Charlie Wasson (USC MS, Finance ’25) spent the past two years as a Watertower Ventures Ventureship Scholar. He worked closely with the team across multiple initiatives including: AI tech stack buildout, deal sourcing, fundraising operations, and more.

HIGHLIGHTS FROM CHARLIE

The Ventureship Scholars Program gave me an inside look at venture capital that you can’t get anywhere else. From day one, I was trusted with real responsibility eventually take on important roles in sourcing deals, supporting portfolio companies, and learning directly from the partners and founders shaping the ecosystem. I was able to see how a fund operates from the inside, understand how investors think, and get hands-on experience. It’s the kind of program that gives you the knowledge, confidence, and network to build your path in venture and the broader industry of finance, investment banking and consulting.

INSIGHTS FOR FUTURE VENTURESHIP SCHOLARS

· Getting thrown into the fire early.
Taking calls early with Idan and Caro was the fastest way to learn. It helped me build judgment, get real reps, and develop a strong understanding of how we evaluate companies and founders.

· Shadowing calls in Idan’s office.
Listening to portfolio updates, investor conversations, and founder calls gave me a much more holistic view of what venture looks like. It gave me context on the portfolio, live deals, and how to close deals/issue a term sheet.

· Monday meetings were extremely valuable.
They helped me understand the market, what’s changing in venture, and how a venture firm thinks about deals. There were two semesters where I missed Mondays and it was noticeably harder to stay up to speed. Being in these meetings each week in person also helped me talk confidently about the venture market / trends / fundraising in venture during my interviews.

· Real contributions on live deals.
I always felt like I could speak up in meetings, give my thoughts on companies I sourced, be brought onto calls and work on live deals. That level of trust made it feel like actual investing work instead of just the administrative/intern work that you may get from other programs.

· Visibility into the portfolio.
Hearing how founders are doing post-investment and what challenges they’re working through helped me understand how to monitor companies after the first check and also how companies evolve post investment.

· Seeing what’s exciting in the market.
Getting to see deal flow from other funds and accelerators made it easier to see what categories are hot and understand how other firms think about companies.

· Being a part of the team.
Being able to walk into any conversation, sit in on any call, or ask questions without feeling like I was interrupting made the whole experience very different from a typical internship.

APPLY TO THE PROGRAM

Watertower Ventures is hiring their next cohort of Ventureship scholars for 2026 and beyond. You can learn more about the program here: https://www.watertowerventures.com/ventureship

Apply via email with resume and interest: intheflow@watertowerventures.com

Ventureship Scholar Testimonial — Charlie Wasson was originally published in WTV In The Flow on Medium, where people are continuing the conversation by highlighting and responding to this story.

Introduction

There is little doubt that AI has the potential to unlock unprecedented efficiencies across virtually every industry. However, to fully realize the benefits of AI, it is critical that products are developed and used in a secure, safe, and trustworthy manner.

History tells us that new waves of technologies lead to huge opportunities for companies that provide security around them, and thereby enable wide-scale adoption for businesses and consumers. We saw this with the early internet, with the growth of large-scale networks, and later, with cloud computing and big data. Massive security companies emerged during each successive technology wave and have created immense market value.

Now, with enterprises focused on developing AI-based solutions, existing systems and workflows need to be completely re-shaped to fit this new technology. For example, EY’s 2023 study showed that only one in five C-suite leaders believes that their cybersecurity approach is effective for todays and tomorrow’s challenges. We believe there is enormous white-space for companies to address this security segment and develop innovative solutions across AI and ML development, testing, monitoring, risk, security, and safety to ensure enterprise-grade AI products.

This piece will examine the historical backdrop within software security and safety, the emerging startup landscape, and areas of focus for evaluating companies in this new space.

Historical Context

From the earliest days of the internet, security has been front-and-center as a mission critical and high impact component of the tech stack. External threats that target personal or sensitive information can have extremely severe consequences to businesses in all sectors. As a result, enterprises put a premium on securing their assets and deploy cybersecurity solutions to protect their digital environments. As technology continuously evolves, new vulnerabilities emerge and therefore new opportunities for security-focused companies. With the latest wave of AI/LLM/ML systems entering core infrastructure, legacy solutions are not designed to protect and manage the new vulnerabilities associated with these systems.

Taking a look at the historical backdrop, we have identified several waves of large security companies entering the market as technology has evolved over time.

First wave: during the 1980s and 1990s, as the early internet formed, cyber threats advanced from pranks and experiments to increasingly sophisticated attacks. This resulted in the original antivirus and firewall software and the emergence of early cybersecurity giants that would grow into multi-billion-dollar valuations. Key players include Symantec (1982–2019) (acquired by Broadcom), Cisco (1984 — present), Trend Micro (1988 — present), VMWare (1998–2023) (acquired by Broadcom).

Second wave: the 2000’s saw the wide adoption of the internet, the proliferation of large-scale networks, the growth of software-as-a-service, and the emergence of key enabling technologies like big data and cloud computing. These dynamics resulted in new, increasingly [CD2] complex software stacks and an expanded surface area for threats and security issues. Additionally, more advanced adversarial techniques such as phishing, malware, and data breaches presented new challenges for businesses and consumers alike. As a result, another wave of massive security companies formed. Key players (all of which are still in operation) include Fortinet (2000), Proofpoint (2002), Palo Alto Networks (2005), Zscaler (2007), Datadog (2010), CrowdStrike (2011), SentinelOne (2013), Aqua (2015), and Wiz (2020). The collective valuation of these companies currently exceeds $300 billion (including companies from the first wave, the collective valuation exceeds $500 billion).

Third wave: the continual emergence, growth, and size of the aforementioned companies over the last few decades illustrates the critical nature of security in the software landscape. Today, we believe we are entering a new era of security, safety, and trust with the introduction of Large Language Models (LLMs) and AI. Like previous technology waves, AI will reshape software stacks, introduce new vulnerabilities, and create new opportunities for security-focused companies. However, perhaps distinct from previous waves, this next wave will focus not only on security, but also on trust and safety. AI’s capabilities to automate and make decisions will necessitate an unprecedented level of scrutiny and reliability as systems will not only require protection from external threats but also need to operate in a manner that is transparent, ethical, and aligned with human values. This convergence will define the new era, where protecting data and systems goes hand-in-hand with building AI that people can trust and rely upon.

Emerging Startup Landscape

Over the last few years, billions of dollars of capital have been invested into AI infrastructure and applications, but a large majority of AI products have not yet been fully deployed at the enterprise level. One of the key roadblocks for enterprise adoption of AI is around security, trust, and safety. Hence, there is a huge opportunity to provide safeguards that allow this emerging technology to safely enter the market. Morgan Stanley estimates that the global market for AI cybersecurity products will grow to over $135 billion by 2030, a nearly 10x increase from the $15 billion market size in 2021 (~28% CAGR). This rapid growth will be fueled by a surging startup landscape and new batch of ambitious founders that are prepared to meet the challenges around secure, trustworthy, and safe AI deployment.

We are already seeing a massive influx of venture capital investment in the space.. Given the nascent stage of the industry, seed stage investments have been the most active. So far in 2024, there have been at least 10 early-stage companies funded: illumex, Simbian, EdgeRunner AI, TrojAI, Liminal AI, Trail, Almanax, Verax AI, FairNow, Apex.

Startups in the space generally fall into one of several categories:

Risk Management & Governance: help companies understand their exposure to AI products and manage organizational risk associated with AI.

Observability & Transparency: enable companies to audit and gain insights into how AI is being used across their organization (e.g. provide transparency through usage logs).

Building, Training, Testing: help companies build and test AI products in a safe and compliant manner (e.g. hallucination testing, jailbreak testing, sensitive data masking, and red-teaming).

Monitoring, Detection, Response: detect and respond to security issues that arise while AI products are in use (e.g. firewalls, filtering, data protection, breach control).

Emerging Startups vs. Incumbents

While there are large incumbents in the security space that offer a broad umbrella of products, these products are typically adjacent to what they already offer, allowing companies to capture synergies across product lines. For example, Proofpoint began with email security and expanded into areas such as data loss prevention and cloud security, capturing synergies by leveraging their expertise in threat intelligence across email-related cybersecurity solutions.

This new wave of security, trust, and safety required for leveraging LLMs and GenAI represents a new market and a new form that is distinct from the core focuses of second-wave incumbents. While it would be naive to say that no incumbents will attempt to expand into these verticals, it’s a much more challenging opportunity for incumbents to invest in and realize synergies; existing solutions and infrastructure can’t simply be retrofitted to address these new foundational problems. This creates a unique wedge for startups to capitalize on new security needs by being nimble and developing superior products that are built from the group up to meet the specific demands of AI security. For example, Troj AI addresses these emerging security challenges by developing advanced techniques to detect and mitigate adversarial attacks within AI models, particularly focusing on trojans and other embedded threats, and Lakera specializes in the detection and prevention of adversarial attacks and data poisoning via AI firewalls.

Evaluating Trust and Security Start-ups

As evidenced by the historical and current landscape, security is not a winner-take-all market — cybersecurity remains competitive and fragmented due to the vast and constantly evolving landscape that increasingly calls for specialized solutions. While there are many success stories, including multiple current players with market caps above $10B, the market has shown that no one company can effectively cover all aspects of security. As this third wave is just kicking off, it’s likely that emerging startups will be the dominant force tackling this new era of security. Below are a few of the areas we like to dive into to understand a potential opportunity and identify future winners:

● Early signs of traction: Silicon Valley businesses are typically first movers for new technology, with early adopters often being other start-ups. However, the winners often build big businesses by selling to enterprises. Early customer interest and traction from larger Fortune 2000 enterprises, even at a micro-scale, can signal meaningful market fit and potential for larger, stickier contracts.

● Team: This is a highly technical category and having a team with experience and expertise in AI/LLM development and/or cybersecurity is critical. Founders with institutional and industry knowledge and a proven track record of building and selling technology solutions stand out.

● Go-to-Market / Entry point: Powerful technology is meaningless without a problem to solve. It is key to evaluate the target customers’ pain point and willingness to pay for a solution. The AI security space is vast, and a differentiated entry point could be the early advantage to a winner.

At the end of the day, this is a nascent market filled with opportunity, excitement, fear, and speculation; no one truly knows how it will evolve and look in the coming years. But, we believe solutions that facilitate trust, safety, security and compliance are mission critical. We anticipate a number of successful companies emerging during this new wave, offering specific, superior products that provide critical trust and security in the new era of LLMs and GenAI.

If you are a startup in this space, or an investor who agrees or disagrees with this post, please reach out; we’d love to chat!

Authored by: Idan Levy, Caroline Doyle, and Sam Gansler

AI Trust & Safety — A New Tech Stack Requires New Solutions was originally published in WTV In The Flow on Medium, where people are continuing the conversation by highlighting and responding to this story.

Last week we shared the Mechanics of Capitalization — How to Capitalize Your Startup where I presented a different approach to capitalizing a business. I demonstrated how taking less capital early on and raising only what you need to get to the next stage of your business results in more ownership to founders and early stakeholders, generating meaningfully more value to your net worth in the long run.

In this second part of the Mechanics of Capitalization, I will dive into the differences between SAFE Notes and Priced Equity Financing rounds and how each impacts the cap table. Note: I acknowledge every deal is different and this blog is simply meant to be informative.

Lets start with basic definitions:

SAFE Note (Simple Agreement for Future Equity): A financial agreement between a company and an investor promising future ownership in exchange for capital at the time of execution (see SEC Definition for SAFE here).

Preferred Stock (issued in Priced Equity Rounds): A type of security that represents ownership in a company with preferential rights over common stockholders defined in the security agreements (see SEC Definition for Preferred Stock here).

SAFE Notes have become a popular financing structure in the early-stages, especially in angel and pre-seed rounds, and have a perception of being “easy and clean”. SAFEs often include a valuation cap and/or a discount which derive the price per share upon conversion. With SAFEs you do not need to define and establish important protective provisions and governance protocols (ex: composition of the Board of Directors) which are a major part of Preferred Stock issuances in Priced Equity Rounds. Note: To mitigate this many institutional investors such as VC firms will require a side letter or management rights letter accompanied with the SAFE in order to invest.

As such, SAFEs are typically faster and cheaper to execute thanks to lower legal bills and fewer reviews.

Although that may make sense at the earliest stages, I have seen some founders continue to raise on SAFE Notes in subsequent fundraising rounds, stacking totals north of $5M outstanding on SAFEs. In addition to kicking the can down the road on key governance issues, such an approach can also have major negative ramifications to the cap table and be highly dilutive.

When SAFE Notes convert at the next equity financing or liquidation event, new (additional) Preferred Shares owed to the previous investors are created and added to the cap table. These SAFE holder shares are created concurrently, typically right before the new equity shares for the incoming capital are created (depending on capitalization definitions). That means the shares of the SAFE holders do not dilute each other regardless of when that capital came in. On the other hand, with Priced Equity Financing rounds, the Preferred Shares are created at the time of investment, hence the dilution takes place immediately and does not accrue.

I will use an EXTREME example to demonstrate how this plays out:

Scenario 1: Raising every round on post-money SAFEs with defined valuation caps.

Scenario 2: Raising every round on Priced Equity with defined valuations.

Take note of the Total Shares count which is effectively what happens to the cap table in the different scenarios. Comparing the two in this extreme example, it is easy to see that raising multiple rounds on SAFEs can result in a higher dilution hit to founders’ ownership compared to raising the same amount in Priced Equity Rounds.

Of course, as previously stated, every situation is different and the potential outcome depends on the details and defined terms. This exercise is simply meant to help founders better understand how the security type used for financing may impact you and your stakeholders in the future.

In summary:

SAFEs are typically faster and cheaper to execute.

SAFEs have fewer rights and governance protocols defined and can be more dilutive.

Priced Equity rounds are typically longer to execute and more expensive.

Priced Equity rounds define standard governance protocols and preferred rights and can be less dilutive.

My two cents:

SAFEs make sense for very early-stage companies and smaller rounds (<$2M) because at those stages it is more important to focus on establishing a business than getting bogged down in governance. However, as a business matures, SAFEs are not fiduciarily responsible and sophisticated investors in later financings will almost certainly required Priced Equity Preferred Shares in order to invest.

If you have any questions on the Mechanics of Capitalization and would like to discuss further, please reach out!

Authored by Idan Levy (Watertower Ventures)

Mechanics of Capitalization — SAFEs vs. Priced Equity Rounds was originally published in WTV In The Flow on Medium, where people are continuing the conversation by highlighting and responding to this story.

Venture Capitalists are professional deal structurers. Building pro-forma cap tables and evaluating various investment structures is part of our daily activities. For founders and CEOs, it is not. Serial entrepreneurs or founders with a finance background may have some experience with cap tables from previous fundraises, but even that is limited to a handful of financings compared to the hundreds under a VC’s belt. First-time founders may have zero experience with this as they go through their first fundraise.

The truth is, building pro-forma cap tables and structuring an investment is not the core responsibility of a founder. However, the ramifications of how you capitalize your business directly impacts your ownership and, consequently, your own net worth. Though you don’t need to know how to do it, it is imperative you understand how it works. This two-part blog series is meant to help founders better understand the Mechanics of Capitalization.

With the “free-money era” seemingly in the rearview mirror, valuations have come down and negotiating leverage has shifted. It is more important than ever to understand the long-term effect of the capital you bring in to finance your business. Note: I acknowledge every deal is different due to the many levers and investment terms that can be negotiated.

To kick things off, let’s discuss a few common misconceptions. I’ve discussed these three things at length with dozens of founders and yet they keep coming up.

· Dilution in later rounds is higher than that in early rounds >> NOT TRUE.

As a founder it is important to be dilution sensitive; however, as the business matures, founders’ negotiating leverage increases and the company becomes less risky, resulting in less dilution in later rounds compared to that in early rounds.

· SAFEs are always the best option early on >> NOT TRUE.

SAFE rounds are cheaper (thanks to less legal fees) and faster, however stacking SAFEs is more dilutive to founders; it depends on the amount raised and stage but it reaches a point that continuously raising on SAFEs is a poor strategy. More to come on this…

· You need enough capital to last you 24+ months >> NOT TRUE.

Founding a business is a high-risk venture and the reality is, especially early on, you are not going to be on stable ground. In entrepreneurship, a mere 6 months is an eternity and your company can look drastically different in that timeframe. When thinking about fundraising, define target goals for the next stage of your business and aim to raise enough to clear those. Fundraising is a huge distraction from building your business and a prolonged fundraise to bring in a few extra bucks is actually slowing you down. Not to mention the misconceived stability that comes with a plush bank balance that often leads to overspending and resource allocation on non-priority initiatives. You are going to have to raise again, just focus on what you need right now instead of what you want.

Now, with the above in mind, let’s explore how a founder’s ownership gets diluted over time across financing events. I will use a hypothetical example scenario that is derived from our experience investing in early-stage businesses over 20+ years.

In Scenario 1, I lay out the traditional venture-backed capitalization path using actual historical numbers. The Funding Amounts and Valuations in Scenario 1 are the average from the last 10 years (2013–2023) for that respective financing stage per Pitchbook. In Scenario 2, I take a “Less is More” approach in which the founder raises less capital early on but accelerates the fundraising cycle (i.e. shorter time between raises). This additional tweener round allows the founder to get the business to higher revenue milestones before bringing in significant capital. The estimated valuations in Scenario 2 are derived by applying the same revenue multiples as Scenario 1 to the higher achieved revenue in Scenario 2.

Comparing the two scenarios above, it is easy to see that raising what you need (i.e. less early on) can be more valuable to a founder’s own net worth in the long term, a whopping +9% as modeled above. If you sell your company for $500M, that equates to +$45M to the founder simply by taking a different capitalization approach!

Of course, as previously stated, every situation is different. There may or may not be additional conditions that allow this financing structure and path. Further, there are many business models that don’t even require this amount of capital to grow and succeed. Regardless, as a founder it is important to look multiple stages ahead and understand how capitalizing your business today may impact you and your stakeholders in the future.

In the next blog post, I will dive into the differences between SAFE Financing rounds and Equity Financing rounds and again how they impact a founder’s ownership position.

If you have any questions on the Mechanics of Capitalization and would like to discuss further, please reach out!

Authored by Idan Levy (Watertower Ventures)

Mechanics of Capitalization — How to Capitalize Your Startup was originally published in WTV In The Flow on Medium, where people are continuing the conversation by highlighting and responding to this story.

In the evolving landscape of real estate investment, a disruptive concept has emerged with the potential to democratize access to attractive property markets: fractionalized real estate. This innovative approach allows retail investors to own a fraction of real estate properties which were otherwise inaccessible to them. Investors can then participate pro-rata in monthly rent dividends, equity and home value appreciation and potential gains upon sale.

Individual investors have historically sought to diversify their portfolios by entering the real estate market, but high barriers to entry (specifically: high capital requirements and institutional competition) can hinder their participation. One investment route into the asset class is through Real Estate Investment Trusts (REITs), but their drawbacks, such as investment lock-ups and lack of selection autonomy, dampen their allure. Now, there are a number of fractional real estate platforms offering retail investors an accessible and flexible way to enter the real estate market, enabling them to choose specific properties for investment without the constraints of traditional models (see: Arrived Homes, Fundrise, HappyNest, and Lofty to name a few).

On the platform side, one approach to this fractionalization is using blockchain technology and property tokenization. This method consists of creating a holding entity of the property then tokenizing ownership of that entity, essentially creating thousands of tokens that are available for investors to buy, sell and manage. In regards to governance of the home and of the token offerings, one approach is through decentralized autonomous organizations, or DAOs. These DAOs can operate based on a series of smart contracts that serve as a governing body through a rule set and voting from the investor base.

Startups focused on this space see a large opportunity of retail (and also institutional) investors interested in adding real estate (with increased liquidity) to their portfolio, as well as a market of over $47tn in residential property assets that can be tapped into. However, with this big opportunity come big challenges that still need to be overcome for the right model to truly unlock the potential here.

We briefly overview a few of the big challenges and opportunities below.

BIG CHALLENGE

Education: Bridging the Knowledge Gap

One of the challenges in fractionalized real estate is the lack of nuanced understanding of blockchain applications and the fears surrounding reliance on cryptocurrencies. Educating investors about the technology’s potential and differentiation from cryptocurrencies can pave the way for broader adoption.

Regulation: Navigating Uncharted Waters

The regulatory landscape remains ambiguous, with the SEC yet to provide definitive statements on whether tokens from DAO agreements classify as securities. This has resulted in two different behaviors from companies — some align to the “move fast and break things” mentality adopted by other disruptive companies, choosing to assume a token is not a security. Others, monitoring the general souring of cryptocurrencies over the last 18 months have adopted a more conservative approach and securitize their tokens, increasing onboarding friction and in some cases limiting accessibility to accredited investors.

Supply: Limited Supply and Managing Quality

Finding suitable properties for tokenization can be challenging due to the high demand and alternatives of prime properties. Many of the business models attempting to fractionalize real estate are built on acquiring the real estate properties to onboard to their marketplace; acquisition not only requires significant capital, but also requires winning these real estate opportunities. The last few years have seen high competition in residential real estate from individual families, small-to-medium size real estate firms, as well as large institutional investors (example: BlackRock), driving housing prices up and potentially impacting unit economics of investment. If you are considering investing in fractional real estate, be sure to take the time to understand the asset and expected financials. In most cases platforms are establishing due diligence practices and utilizing third party inspections and titling services to mitigate potential issues and provide critical information to retail investors. However, the quantity of available homes remains a huge problem for these fractional real estate platforms as they look to scale. This is a supply-constrained industry.

BIGGER OPPORTUNITY

Homeowner and Investor Needs: Finding a Win-Win

Offering partial equity offerings to investors can meet the dual needs of homeowners seeking liquidity and investors seeking yield and diversification. This is an alternative method for homeowners to access equity without selling or taking on debt, and serves as an attractive investment options for retail investors. Most of the business models in the market today enable investors to partake in property appreciation upon sale, monthly rent cash flows, and / or predetermined monthly yields.

Overcoming the Traditional Real Estate Asset Liquidity Issue

This fractional ownership model unlocks liquidity by enabling investors and home owners to buy and sell these tokens on secondary markets, reducing the barriers to entry and exit associated with whole property ownership. As a result, investors can access real estate markets more flexibly, enhancing overall accessibility and flexibility in the real estate market. Furthermore, for many individuals their home is the largest asset to their net worth; these new models allow these homeowners to tap into that idle value, potentially selling a fraction of their home for cash that can be used for new investments, college payments, etc.

Retail Investor Participation: Lowering Barriers

The high barrier to entry for retail investors in real estate can hinder market growth. Simplifying access through fractional ownership and reduced minimum investments can attract a broader investor base. Just as Robinhood unlocked retail investors for the stock market and ultimately enhanced the stock market, fractional real estate platforms have the potential to do the same for the real estate market.

FORGING THE PATH FORWARD

We have evaluated a number of startups and solutions chasing this category and are bullish on the potential. A winner is yet to emerge, and when the dust settles there may be multiple market makers in this category, but we think a few of the potentially winning characteristics are:

• Scalable and efficient supply acquisition for new properties
• High-quality properties with verifiable documentation, inspection reports and a clean title
• Solid demand made available by a large pool of investors
• Frequent trading through a secondary market to increase liquidity and monetization opportunities
• User-friendly technology that provides all available documentation for review and execution, ideally with options to purchase in fiat dollars
• Asset-light business model that serves as a marketplace, versus an investment qualifier

Fractionalized real estate is a bold step towards democratizing a historically exclusive sector. While challenges such as education, regulation, and model selection loom large, the rewards for overcoming them are immense. Success hinges on balancing risk, building a strong brand that attracts new investors and new properties, and shaping a marketplace that benefits both homeowners and investors.

If you are a startup in this space, or an investor who agrees or disagrees with this post, please reach out we’d love to chat!

Authored by Idan Levy and Olivia Volkel (Watertower Ventures)

Fractionalized Real Estate — Big Challenge, Bigger Opportunity was originally published in WTV In The Flow on Medium, where people are continuing the conversation by highlighting and responding to this story.

For the past several years, we have been tracking impressive entrepreneurs, engineers, and other individuals who were at the nascent, ideation stage of their businesses. These individuals and teams excited us with their ideas but were slightly too early for a core investment from our fund.

It was with these two challenges in mind that we decided to launch the WTV In the Flow Lab. The Lab is designed to support exceptional founders, with an initial investment ranging between $100,000 — $500,000, whose companies are still in the earliest stages of their development and possess the growth potential we seek in all our investments.

The Lab provides initial capital, strategic guidance, fundraising assistance, and bespoke support to founders. As former founders, we understand that the earliest stage of a company’s lifecycle is unique to each business. We don’t believe in cohorts or demo days. We take a unique and tailored approach to all of our Lab companies.

As a complement to our core fund strategy, our vision is to be long-term partners in the success of the companies that go through the Lab. We aim to help these companies grow into core positions in our portfolio and establish a strong, lasting relationship with the founders. As the business of a Lab company progresses, our goal is to lead or co-lead the subsequent financing round. Since the launch of the Lab program in early 2022, we have welcomed two companies, Kodezi and Glacier, and have led follow-on financing rounds in both. Watertower Ventures is actively seeking its next Lab investment and is dedicated to helping companies at their earliest stage bring their ideas to life as long-term capital partners.

If you or someone you know is in the ideation or foundational stage of their business, we encourage you to apply to the WTV In the Flow Lab. Together, we can turn radical ideas into successful companies.

Learn more and apply to the Lab at https://www.watertowerventures.com/in-the-flow-lab.

The Watertower Ventures In The Flow Lab was originally published in WTV In The Flow on Medium, where people are continuing the conversation by highlighting and responding to this story.

Software development has become one of the most highly valued skills in the labor market. Every company has a need for technical talent and roles in the category are estimated to grow by 22% from 2019 to 2029, well above the national average of 4% growth for all other job categories. In terms of number of software developers, as of 2021 there were approximately 27 million developers worldwide. This number is expected to grow to 45 million by the end of the decade. This growth will require a significant investment in education for future job candidates. Aspiring developers have several options, including collegiate classes, bootcamps, and online tutorials to learn to code. Potential candidates are highly motivated to develop the skills necessary to take advantage of this rapidly growing job market.

Kodezi is an AI-powered code editor application that improves your software programming skills. Kodezi offers a unique proposition to support developers and foster aspiring programmers. Through its platform Kodezi enables developers to build, debug, optimize and convert production-level code instantaneously.

Kodezi consists of four main modules: 1) Debugging and providing correct code blocks; (2) Code optimization with AI-driven improvements; (3) Code conversion to different languages; (4) ML/AI-based commenting of code. Most legacy debugging tools in the market are not tailored for beginner to intermediate developers. Kodezi offers a simple solution and a similar value proposition that Grammarly proved successful with writing. Coding is a new form of writing and Kodezi is well positioned to be a foundational platform supporting the increasing demand for software developers.

When we first met founder and CEO Ishraq Khan he was still a senior at Seminole High School in Florida. Despite his young age, Ishraq had already built the first version of Kodezi himself and had won several hackathon events with his idea. A first-generation immigrant from Bangladesh, Ishraq immediately impressed us with his ambitious vision, dedication, thoughtfulness, and technical depth. Ishraq is a full stack software developer with expertise in artificial intelligence and machine learning. We decided to partner with Ishraq at the earliest stage because of the potential we saw in him. Foregoing several full scholarships from premier universities, Ishraq is now leading Kodezi full time. We believe Ishraq and the Kodezi team have the foundation to build a category-defining product that will enable the next generation of software developers.

In August 2022, Kodezi crossed the 100,000 users mark after being in market for less than six months. They have a global userbase from countries such as Brazil, Pakistan, Poland, Russia, and more. The Kodezi team is expanding the product to meet demand and has been fielding new interest from educational and enterprise organizations.

Learn more at https://www.kodezi.com/.

Kodezi — The Smartest Way to Code was originally published in WTV In The Flow on Medium, where people are continuing the conversation by highlighting and responding to this story.

Insync — AI Customer Experience

E-Commerce sales have grown 14% to $870B over the past year and over 50% since 2019 with the global pandemic accelerating e-commerce adoption. The rapid growth has driven increased demand for e-commerce customer experience tools that enable sales, support, and digital interactions. Companies that were unprepared and lacked technology-based solutions to meet this increased demand were negatively impacted. One option for organizations to address customer experience is agent-based call centers; however, these can be costly and have been difficult to staff in a tight labor market. Another option is traditional chatbot solutions; although more scalable, these solutions have lacked the capabilities to fully resolve customer issues, ultimately routing these issues back to call center agents. The future successes of enterprises will rely heavily on their ability to implement effective customer experience automation solutions.

These macro trends convinced us to invest in Insync and we believe the company is well positioned for the rapid growth in this category. Insync is a next generation enterprise artificial intelligence platform that automates the customer experience through chat, voice, and other mediums. Insync’s technology can automatically identify intent, handle context switching, and support omnichannel functionality. Its intelligent AI agent is continuously learning, using past customer interactions combined with knowledge artifacts to improve the customer experience. Further, the product is designed for flexible implementations on top of existing enterprise customer experience systems to ensure that customers see immediate ROI. The flexibility of the product allows it to span across multiple industries. Insync’s early customers include several Fortune 500 enterprises that power their customer experience with Insync AI technology. One such enterprise has been able to reduce monthly call volume by over 25K, achieve over 40% resolution rate without agent intervention and increase annual CSAT scores by over 10% since implementing Insync.

Finally, we are firm believers in investing in people and the Insync team impressed us from our initial meeting. Co-founders Raj Ramaswamy and Ashish Patel were seasoned Yahoo executives that left to solve the customer experience problem. They have worked closely together for over 15 years and possess extensive knowledge in the development of artificial intelligence technology. The team embodies the notion of continuous improvement, and we are excited to partner with the Insync team as they continue to deliver a critical solution to help enterprises provide an elevated customer experience.

Learn more at https://www.insyncai.com/.

Insync — The AI Customer Experience was originally published in WTV In The Flow on Medium, where people are continuing the conversation by highlighting and responding to this story.

One of the most important, and arguably overlooked, business activities is the contract negotiation process. Fortune 500 companies review and negotiate over 250,000 contracts annually. That equates to more than 25,000 hours per company spent redlining, comparing, and tracking contracts with thousands of unproductive hours lost. In-house legal departments are essential stakeholders when it comes to B2B and B2C contracts, however they oftentimes become a bottleneck due to limited capacity and inefficient workflows. This can lead to long closing cycles, additional expenses, and lost revenue. The problem that persists today is one that has existed for decades and has never been solved: the contract review and negotiation process remains the most expensive, complicated, and time-consuming phases of the contract lifecycle.

The inefficiencies occur because the contract negotiation process involves multiple parties, both internally and externally, and repetitive issues arise for each contract. Companies also struggle with version control issues and lost communications as most of this work is currently done through emails, chat and offline word documents.

DocJuris provides a solution to these problems by offering a cloud-first contracting platform that empowers sales, legal, and procurement teams to close deals with speed and accuracy. DocJuris’s core solution is a user-friendly collaborative markup and editing tool. The technology and AI solution automatically organizes clauses, scans for changes (marked up or not), and compares key clauses to those defined in the company’s legal playbook. Companies can also import their prior agreements into the platform and the system will use AI to surface prior clauses to expedite negotiations. DocJuris can be easily integrated with all the existing solution Contract Lifecycle Management (CLM) systems.

Furthermore, by employing its AI solution to aggregate and employ past best practices, DocJuris helps customers reduce internal legal risk and ensure that company standards are met across all agreements. The strength of the product has been validated through its pilot customers, including Dell, Fedex, and Toyota.

DocJuris is tackling a large market: the US corporate legal market stands at $160B and growing, of which $35B is comprised of contract lifecycle technologies and solutions. The acceleration of remote-first and hybrid work has forced companies to rethink the ways they conduct business, and we believe that DocJuris is an enabling technology well positioned to revolutionize the way contracting is done across industries.

Lastly, throughout the investment process we were thoroughly impressed with the DocJuris team. We have full confidence in their ability to deliver an industry leading solution that drives business and saves companies significant time, costs, and resources. Having spent over a decade as an in-house lawyer, Henal Patel, CEO of DocJuris, has extensive knowledge in addressing the problem that he has faced his entire career. He is joined by a strong technical team led by co-founder and CTO, Brian Ng, a business-oriented engineer with strong technical skills and management lens.

Learn more at https://www.docjuris.com.

DocJuris — Why We Invested was originally published in WTV In The Flow on Medium, where people are continuing the conversation by highlighting and responding to this story.