Building the AI-First Future: Inside Tau Ventures with Amit Garg

When Amit Garg and his co-founder Sanjay Rao started pitching their AI-first venture fund in 2019, they got an unexpected question: “Do you think it's a big enough thesis?”“Nobody asks us that question anymore,” Garg laughs.That moment captures something essential about Tau Ventures: A willingness to bet on the future before it’s obvious to everyone else. After working together at Norwest Ventures 15 years ago and staying in touch through a decade of building and investing, Garg and Rao finally launched their fund at what they saw as the inflection point for AI.They were right.With $93 million under management across three funds, they’re deliberately small.

The numbers are interesting: they see 6K deals a year and invest in one per month. About 0.2% of companies get funded. Yet 98% of their portfolio companies go on to raise the next round. Their portfolio includes names like Assort, Labelbox, and Iterative, alongside a steady stream of early-stage innovators redefining healthcare and enterprise AI.We can’t do justice to every company that’s coming to us,” Garg admits.

But the ones that make it through (companies led by US-based CEOs, typically one to three years old, focused on healthcare or enterprise AI) get something more valuable than just capital.Tau's investment approach is refreshingly straightforward. They call it “n plus 1”: Make an initial bet and then double down on the winners. In their first fund, half went to initial checks and half to follow-ons. But those follow-ons were concentrated in the companies returning 10x or more.“From an LP perspective, from a return perspective, that means we take a lower risk with a higher return,” Garg explains. Also, if a portfolio company drops below six months of runway, it’s all hands on deck with finding customers, connecting investors, and extending the runway. Sometimes the best outcome is finding the right acquirer. Tau has helped numerous companies find homes, protecting the downside while shooting for the upside.Ask Garg what he looks for in founders, and you won’t get a checklist. Credentials help (the right schools, the right companies, the right experience), but those are pluses, not requirements.“What we do look for is aptitude. Do you have the ability to learn? Will you work well with us? But would you also have the conviction to go build something that’s kind of crazy, that’s against the odds?”It's a paradox he's comfortable with: entrepreneurial hubris combined with humility.

The confidence to believe you can succeed paired with the self-awareness to know you might fail.While other VCs talk about their networks, Tau has built something more tangible: a community of over 5K investors on their mailing list, with posts regularly hitting 100K views. LPs can co-invest directly alongside Tau with no management fee or carry as well. “It’s a team sport,” Garg emphasizes. “It’s not about you being the only one taking the risk.

It’s you with others, working as a team, with advisors, a whole ecosystem built of people who are invested and vested in the success of a vision.

”Garg’s personal passion is digital health, and the timing couldn’t be better. Healthcare is now the number-one industry adopting AI, driven by mounting pressures on a system that severely underserves patients.With an undergraduate degree in computer science and biology, a master’s in biomedical informatics, and experience as both founder and investor in digital health, Garg has been waiting for this moment for a long time.

His background includes research on tau proteins implicated in Alzheimer’s (part of the inspiration for the fund’s name). What’s striking about Garg is how deeply he embeds learning into everything. VC, he explains, is almost by definition for people who are curious and lifelong learners. Every meeting is a chance to learn from someone who knows more about their particular domain, someone with dreams they’re actively building.

But there's a balance: curiosity paired with conviction. “There’s a thousand reasons to say no,” Garg notes. “But there’s usually one reason to say yes.”The name Tau comes from the Greek letter, carrying meanings across mathematics, physics, biology, and astronomy. It’s a better representation of the circle in mathematics. It’s tied to proteins in Alzheimer’s research. It represents time and speed in astronomy.

It’s layered and meaningful choice that reflects how Garg approaches everything else.Six years in, with a portfolio spanning healthcare and enterprise AI, Tau Ventures has carved out a distinctive position. “We are still in the early innings, by the way,” Garg emphasizes. “There's a lot more ahead of us.”With agents becoming the new focus and tomorrow promising something different still, Tau’s philosophy of constant learning and unlearning seems perfectly suited for AI’s exponential trajectory.For founders with the right combination of aptitude and grit, for LPs seeking both returns and community, and for anyone curious about where AI is heading next, Tau Ventures offers a clear point of view backed by consistent execution.And unlike 2019, nobody's asking anymore if it’s a big enough thesis.