VCs Have Had No Time Off This Summer. Blame AI.

“Two months ago, venture capitalist Anna Barber thought she was moving fast enough in pursuing a deal with a healthcare AI startup.

 

A partner at early-stage firm M13, Barber emailed the founder on a Wednesday, met her at a coffee shop on Friday, and scheduled a follow-up meeting for Tuesday. Going into her weekend, Barber felt she could unwind and worry about the deal on Monday.

 

One problem: This was a hot AI deal.

 

On Monday morning, Barber logged on to find an email from the founder: Over the weekend an investor at a top-tier seed-stage firm flew cross-country to hammer out a term sheet with them. It was a done deal.

 

"It had my head spinning," Barber said. "You can't sleep on the weekends. It speaks to the excitement in the market right now."

 

Competition between investors to snap up promising artificial intelligence startups has reached a fever pitch. Soaring valuations and talent wars among large mature AI companies have become the norm.

 

At the early and seed stages, investors targeting AI-related startups describe an environment where deals can disappear in an instant. In response, venture investors, already accustomed to moving quickly, are going to extra lengths to win deals.

 

While mountains of capital have already been plowed into private AI companies over the last several years, venture capitalists say there is still value to be mined. Backing fledgling AI startups, they say, is the investment opportunity of a lifetime.

 

"Investors feel tremendous pressure to be in the right deals to capture that value," Barber said.

 

The pace has ramped up, said Molly Welch, a partner at Radical Ventures who focuses on AI.

 

Last summer, during the week of her wedding, Welch said she juggled term-sheet negotiations with AI sales software startup Spara while finalizing floral arrangements.

 

This year, the competition is more intense, she said.

 

"This summer has not been quiet. Every summer has been increasingly frenetic," Welch said.

 

Welch worked through this summer hunting for deals, she said.

 

In July, there were 50 equity deals of $100 million or more for private tech companies, 61% more than the same month a year ago and the highest monthly total since mid-2022, according to analytics firm CB Insights. AI companies accounted for half those deals.

 

After getting shut out of the healthcare AI deal, Barber took a new approach with a subsequent prospect: a "stealth deal."

 

A legal-tech AI startup she is eager to invest in said it planned to begin raising a round after Labor Day. Barber got wind that other investors were circling, and decided to get ahead of the curve, she said.

 

Her stealth deal strategy involved completing a chunk of the due diligence mostly by talking to customers -- without the company or other investors knowing.

 

That way, she could offer the company a term sheet before Labor Day to pre-empt her rivals, she said.

 

Barber revealed her efforts to the company's founder, who she said was impressed by the initiative. She then hopped on a red-eye to New York to meet him.

 

M13 sent the startup a term sheet on Thursday.

 

Neil Sequeira, founder and partner at venture firm Defy, said he, too, has hustled to lock down AI investments. In March, Sequeira's friend Ira Ehrenpreis, who is on the board of Tesla, introduced him to someone he considered a promising founder at a cocktail hour during a tech investing conference in Monterey, Calif.

 

Sequeira said he was so impressed with the entrepreneur, Jon Carr-Harris, founder of AI business-analytics software company Cred, that he invited him to dinner that night.

 

After dinner, they attended a hotel suite party hosted by a sponsor of the conference.

 

"My intention was to not let him out of my sight," Sequeira said, out of fear of having his prospective deal poached. "The less he spoke with other investors, the better."

 

Sequeira, who said he is usually in bed by 10:30 p.m., stayed late at the party, connecting with Carr-Harris over a shared vision for AI and personal interests like music; the pair agreed to buy tickets to see the rock band The Cult together in San Francisco.

 

By 2 a.m., Sequeira said he had offered the founder $10 million, which was sealed with a handshake and pending due diligence.

 

That week, Carr-Harris said he received term sheets from top-tier venture firms, but he turned them down to honor his agreement with Defy. In June, Cred announced it had raised a $15 million seed round led by Defy and other investors contributing capital.

 

"That was totally off the beaten path for me to meet an entrepreneur, spend eight hours together and shake on a deal that night," Sequeira said.

 

"But we weren't going to form that connection with a normal one-hour meeting."” [1]

 

1. VCs Have Had No Time Off This Summer. Blame AI. Vartabedian, Marc.  Wall Street Journal, Eastern edition; New York, N.Y.. 02 Sep 2025: B8.