The questions Leonis Capital investors ask to see if a startup's tech actually holds up

Leonis Capital, a venture firm focused on next-generation AI startups, is deploying its second $40 million fund to identify and invest in promising technologies. Founders Jenny Xiao and Jay Zhao shared their evaluation approach with Business Insider, offering insights into essential questions they pose to potential investments. These inquiries aim to differentiate startups with genuine technical potential from those that may struggle against established players like OpenAI and Google. They emphasize the importance of understanding the non-linear progress in AI capabilities and the potential for fundamental shifts in product use cases.

Key questions include assessing how improvements in model performance could unlock new workflows, evaluating a startup's defensibility against future competition, and determining what proprietary data originates from the product itself. For example, Xiao highlights the need for startups to articulate how they generate unique data over time rather than relying solely on volume. Zhao adds that founders should demonstrate the ability to adapt their thinking and recognize external factors affecting their market, ensuring they maintain relevance in a rapidly evolving landscape. By fostering deep technical understanding and strategic foresight, Leonis aims to back startups that can navigate future challenges and capitalize on AI's transformative potential.