For more than a decade, Jessica Mah has lived at the heart of startup innovation. She has built companies, led teams, raised capital, and now, through her firm Mahway, invests in founders navigating the next frontier of artificial intelligence.
She now splits her time between San Francisco, Los Angeles, and New York City, giving her a front-row view of how capital, technology, and culture intersect. From that vantage point, she’s noticing a clear shift: investors who once poured money into every new idea are slowing down, redirecting capital toward ventures with proven traction and long-term potential.
"The money is still there," Mah said. "It's just not moving the same way."
After years of record fundraising and sky-high valuations, something fundamental has shifted. Family offices, the private firms that manage wealth for high-net-worth families, are deliberately slowing their pace, Mah explained. Professional funds that once raced to join every promising deal are doing the same. The handshake agreements and rapid-fire term sheets that defined the last decade have given way to a more cautious and calculated approach.
Deals still happen, but they take longer. Investors now expect to see revenue instead of prototypes and customer traction instead of potential.
Mah does not see this as a crisis. She sees it as a long-overdue correction.
"Capital isn't disappearing; it's getting smarter," she said. "Investors are becoming more thoughtful about where they put their money and what kind of companies they want to back."
She would know. Mah launched her first six-figure business while still in middle school. By the time most people were finishing college, she had already built multiple ventures and became the youngest woman accepted into Y Combinator, the startup accelerator behind Airbnb and Dropbox.
Now 35 and recently engaged, she has weathered both boom and bust cycles long enough to recognize the difference between a hot market and a healthy one.
After the 2008 financial crisis, the Federal Reserve cut interest rates to near zero. Those rates remained low for more than a decade, changing how investors behaved.
When safe assets paid almost nothing, risk suddenly looked rewarding.
Family offices that once focused on real estate or conservative portfolios started betting on technology startups. As capital flooded Silicon Valley, startup culture accelerated. Growth was everything. Founders raised money at valuations that defied logic. Some companies jumped from idea to billion-dollar valuation in under a year.
Then inflation surged. Rising interest rates meant investors could suddenly earn five percent returns on Treasury bonds, guaranteed by the U.S. government. The incentive to gamble on early-stage startups disappeared almost overnight.
"Some founders had never experienced a normal market before," Mah said. "They didn't know what it was like to operate when capital actually cost something."
The result has been a fundamental reset. Investors are not chasing every new idea anymore. They are filtering more carefully, prioritizing clear execution and credible financial plans.
"This is the healthiest thing that could have happened to the ecosystem," Mah said. "It's forcing both investors and founders to think long-term again."
The pullback in capital comes at a particularly complex moment for artificial intelligence. Just as the technology reaches new levels of capability, the funding environment has tightened considerably.
The most promising innovation cycle in a generation is paired with one of the toughest fundraising climates in recent memory. For founders working at the intersection of these two forces, the contradiction is challenging to navigate.
Part of the problem is oversaturation. Hundreds of new AI startups have emerged over the past two years, many chasing strikingly similar ideas -- customer service chatbots, automated data analytics, content generation tools. The pitches blur together, making it difficult for investors to distinguish genuine breakthroughs from incremental improvements built on widely available models.
At the same time, the technology is evolving so rapidly that investors worry about timing. Why fund a startup today when its core product could be obsolete within six months? The fear of backing the wrong approach has made capital more cautious across the board.
"Every week, something new is coming out with AI," Mah said. "The coolest opportunities? We haven't even begun to think about them yet."
Jess Mah insists that opportunities remain for the right kind of companies. Capital has not dried up; rather, it has simply become more selective about where it flows.
The next wave of smart capital is flowing toward companies that use AI to make industries more efficient and solve costly, measurable problems. These are not viral consumer apps. They are core systems creating real value for businesses willing to pay for results.
"Investors want to see you solving a real problem for people who will actually pay you," Mah said. "Not some hypothetical problem for some hypothetical customer down the road."
Through Mahway, she focuses on what she calls “high-conviction founders.” These experienced operators are deep experts in their fields and who understand both the technology and the specific problem they are solving. Her firm backs ventures across fintech, biotech, AI, and legaltech.
"I look at business ideas every week," Mah said. "What excites me is that with AI, we're able to operate with a much smaller footprint today than even a year ago and have the same amount of speed and effectiveness. You can accomplish in months what used to take years."
That efficiency is reshaping her thinking about what companies need to succeed. Lean teams with AI leverage can outmaneuver larger, more established organizations that still operate with traditional structures and bloated headcounts.
When asked where she sees the biggest opportunities going forward, Mah points to several areas. Women's health remains chronically underfunded despite serving half the population. AI compliance is becoming critical as governments begin regulating the technology. The future of work continues to evolve as companies figure out how AI reshapes employment. Insurtech and fintech offer massive opportunities for AI-native companies built from the ground up with the technology embedded in their operations.
"There's going to be a lot of room for opportunity," she said. "The question is who's going to build it."
Mah's definition of success has matured with experience. Having been part of more than ten founding teams, many valued in the hundreds of millions, she has learned that longevity matters more than hype.
"I want to leave a legacy that shows you can have a great personal life alongside a great career," she said. "Entrepreneurship is hard, but there's a gift in that process."
She is outspoken about the need for better mental health awareness among founders and committed to changing the culture of burnout. She is equally passionate about supporting women entrepreneurs, who continue to receive a small fraction of venture funding.
For Mah, this moment is about discipline and perspective. The era of easy money may be over, but a stronger one is taking its place.
"The founders who survive this cycle will build companies that last," Mah said. "That's what playing the long game really means."
