Investing in AI Technologies: What We Learned from Erez Capital
Editor’s note: The New Tech Ventures Blog is produced by students in the New Technology Ventures course, taught by Assistant Professor of Practice Stephen Brand. The course features tech leaders and entrepreneurs as weekly guest speakers, and students are sharing their insights on the ventures and the experience. This post was written by the team of Giavanna Bravo ’24, Eduardo Guimaraes ’25, and Sebastian Rosing ’25.
This week, our New Tech Ventures course had the pleasure of exploring the world of venture capital through the eyes of Michael Benezra, the founder of Erez Capital, and his colleague Stephen Grant, the founder and managing director of Resonance Advisory Group and a venture partner at Erez Capital.
Erez Capital, founded in 2022, is a global venture capital management firm investing in AI technologies across health care, financial, and real estate sectors. It operates across five continents and provides an extensive due diligence process to “ensure that risk mitigation and breakthrough innovation go hand-in-hand.”
Featured on Boston Business Journal’s 40 Under 40 list, Benezra’s footprint in the venture capital world has been influenced by his academic background in social and political science. Prior to launching Erez Capital, Benezra worked alongside the Israeli Ministry of Health and Moderna to secure the first supply agreement outside the U.S. for mRNA for a COVID-19 vaccine. He also has experience working for the U.S. House of Representatives, the state of Washington, the White House, the Commonwealth of Massachusetts, and the Ministry of Foreign Affairs. He additionally launched GK Fund in 2020, which is the first social impact to raise capital for BIPOC founders in Massachusetts. His work is rooted in social impact.
Grant is the founder and managing director of Resonance Advisory Group, specializing in mergers and acquisitions with founder-led businesses. His career includes key roles as director at Equiteq and vice president at Jefferies, demonstrating his expertise in corporate development and investment banking. Currently, Grant also serves as a venture partner at Erez Capital, supporting investments in AI, MedTech, and clean energy
Their presentation was vital in our journeys as entrepreneurs as they provided ample advice on how to structure ventures for further investment. As some of our students integrate AI into their ventures, it is vital that they understand the criteria that firms like Erez Capital are using for investments.
A Deep Network: The Key to an Innovative VC Firm
During our session, Benezra walked us through Erez Capital’s approach to investments. Benezra believes in reverse engineering in venture capital. This process incorporates technology diligence, general due diligence, and a finance committee. Technology diligence involves beta testing conducted by Erez Capital’s technology experts whereas general due diligence produces comprehensive assessments through utilizing collective knowledge within the firm’s network.
This process is largely due to Erez Capital’s strong network of venture partners and strategic partnerships. The firm boasts partners from companies ranging from OpenAI to J.P Morgan to Airbnb, allowing for strong expertise and deal flows. Their strategic partnerships include Harvard Business School, Wharton Impact Investing partners, and Babson College. These partnerships allow for initial access to advanced AI technologies. Benezra explained how his network of partners allows his firm to be a disruptor in the VC space through its ability to drive a diverse range of investments.
AI in the VC Market
During his portion of the presentation, Grant spoke about how venture capital is now primarily focused on AI. He emphasized how megadeals related to AI are achieving over $100 million and accounting for a significant portion of annual venture capital activities. He largely attributed this find to powerful corporate venture capital players such as Microsoft, Amazon, and Nvidia over traditional venture capital firms. This involvement is different compared to similar “tech booms.” Corporate venture capital firms are horizontal whereas traditional venture capital focuses on “shifting up the stack” as they believe AI companies will still focus on building the application. Overall, the involvement by corporate players is creating problems within the greater venture capital industry as they often delay traditional initial public offering exits.
Grant drew our attention to the increasing investment in Magnificent 7 AI investments. The Magnificent 7 are U.S. tech companies such as Meta, Microsoft, and Apple, that have the highest stock performance. Their investments are able to incorporate benefits such as strategic partnerships and cloud platforms that traditional venture capital firms cannot compete with. The Magnificent 7 companies are also making large bets on AI companies such as OpenAI, Anthropic, and Databricks, intensifying the competitive landscape. The Magnificent 7 are horizontally focused, investing in foundational models, nature language technology, and automation platforms. Traditional venture capital firms are in a position in which they cannot compete with the dollar amounts provided by Magnificent 7 firms, but they are continuing to “aggressively” fund AI funding through vertical applications. Their focus is oriented toward financial services, industrial services, consumer services, health care, and IT.
Benezra’s Advice to Us
Benezra reminded us that alone we can do so little. Given Benezra’s experience working in diverse teams, both in backgrounds and skill sets, he advised us to always take advantage of the network around us. Benezra emphasized that in our careers, we don’t always have to go into things headfirst as individuals. He taught us that it is better to leverage the diverse skill sets of those around you to build something impeccable.
He insisted that if multiple people were seeking to work for him at Erez Capital, he would rather see them send one collective email, rather than receive several individual inquiries. He prefers to see great individuals or ideas come together, as though they are each individual pieces to a puzzle. This thinking is truly reflected in how Benezra strives to “connect the dots” between technologies and companies to create a strong synergy.
Concluding Thoughts
We are grateful for Benezra’s and Grant’s tremendous lessons on how venture capital spaces are evolving. Understanding Benezra’s approach to VC and comparing it to other guest speakers is key in our comprehension of differing sourcing, development, and consulting strategies. Additionally, we now have a newfound knowledge of how modern technology is impacting the venture capital industry. As our existing competencies in AI technologies expand, it is vital to consider the corporate players shaping its scale and development. Understanding how AI technologies are viewed by corporate venture capital firms versus traditional venture capital firms is key to our entrepreneurial thinking toward technological disruptions. The idea of focusing on vertical applications of AI in sectors such as finance or health care sparked new directions for how we might pursue our own business interests. Benezra’s perspective on collective strength and Grant’s analysis of the AI landscape allowed us to think deeply about how we can differentiate ourselves as tech entrepreneurs. We each feel that we should place more emphasis on finding the right strategic alliances.
Overall, listening to Benezra’s and Grant’s insights shifted our mindsets on how we can approach building our own ventures. Benezra’s emphasis on leveraging networks and diverse skills truly resonated with us. He allowed us to realize the power of intentional network building based on complementary skills. We feel that now we can better build ventures that are both resilient and innovative. Their presentation reminded us of the mindset and partnerships we must acquire to make our ideas come to fruition. We feel that we now have a greater sense of purpose in connecting with others to drive meaningful change in tandem with new technologies.
Posted in New Tech Ventures Blog
