How AI FOMO is Fueling VC Competition

June 18, 2025 / Monica Zent
Venture Legal 8

When Tim Cook said more than a decade ago that competition makes everyone better, he probably did not imagine how relevant those words would be to the rise of artificial intelligence in venture capital. The Original Copy investment race has created an environment where speed and precision matter more than ever. Similar patterns are also visible in the legal tech sector, where adopting advanced tools has become a necessity rather than a choice for any serious legal services provider.

According to recent reporting from PitchBook, record levels of dealmaking are being driven by the fear of missing out on AI opportunities. This shift not only influences traditional VC firms but also affects investors who are backing ALSP and other companies at the intersection of law and technology. In such a competitive climate, the question is less about whether to use AI and more about how to use it in ways that create long-term differentiation.

In this edition of Venture Legal, I explore some of the strategies firms are using to adapt, including:

  • Taking a vertically specialized approach that highlights niche expertise
  • Strengthening startup support with tailored resources and legal support services
  • Developing clear communication strategies that build credibility and trust

Follow Monica on Substack and subscribe to read the featured story:

Venture Legal, Ed. 8: How AI FOMO is Fueling VC Competition

  • LegalTech Goes Global! (Part 2)

    By Monica Zent | October 10, 2025

    In just the past two weeks, since publishing Venture Legal’s LegalTech Goes Global (Part 1):   As VC-funding startups rapidly scale globally, this week’s edition of Venture Legal is Part 2 of the LegalTech Goes Global series. This week I’m exploring:   Follow me on Substack and subscribe to read the featured story! Venture Legal,…

  • LegalTech Goes Global! (Part 1)

    By Monica Zent | September 24, 2025

    When Business Insider, reporting that LegalTech funding had crossed $1 billion so far this year, curated a select list of 10 LegalTech startups, two hailed from outside the U.S. – Sweden’s Legora, which had an $80M raise in May, and Britain’s Luminance, which had a $75M round in February.  This week’s edition of Venture Legal…

  • ”Where Do the Dollars Go Next?” Funding, Adoption & Competition in LegalTech

    By Monica Zent | September 11, 2025

    “A foundational shift is underway in the legal sector – driven by generative AI, rising cost pressures, and a new wave of founder-led innovation,” wrote Alumni Ventures’ Clare Brandfonbrener this summer. “But this won’t be a winner-take-all market,” she notes. Amid rapid AI-driven change, big startup funding rounds, and intense competition for market share, in…