David Blumberg has been investing in technology companies since long before Miami became a serious stop on the venture capital map.
As founder and managing partner of Blumberg Capital, which he established in 1991, Blumberg has watched several major technology cycles play out. Today, much of his attention is focused on artificial intelligence and the changes it could bring to companies, investors and the broader economy.
Miami has a role in that story, he argues. Blumberg [pictured above] sees Florida attracting more capital, founders and companies, while giving startups in some sectors an opening to build relationships and gain customers in ways that can be harder in more established tech centers. He is especially interested in what happens as AI makes smaller teams capable of building much larger businesses.
On the sidelines of SuperReturn in Los Angeles, Refresh Miami caught up with Blumberg to discuss the state of Miami tech, how AI is changing venture capital, what he is seeing from LPs and what founders and investors should keep in mind as they consider the opportunities ahead.
This interview has been condensed and edited for clarity.
Refresh Miami: How do you see Miami’s place in the tech ecosystem right now?
I think you have to look at Miami in the context of Florida more broadly. State policy matters because that is where a lot of the tax and regulatory environment is set. Florida has attracted a lot of people, wealth and businesses, and with that come new jobs, new industries and new companies.
You’re seeing more LPs move to Florida, especially family offices, and you’re seeing major companies establish a bigger presence here. It has become particularly strong in financial services.
The talent base is growing as well. Florida may not yet have the depth of engineers that some other markets have, but the technical universities are producing more talent, and people are increasingly willing to relocate here. The old idea was that you moved to Florida to retire. That’s no longer the case. Many people are coming here to work and to build.
What advantages can Miami offer founders compared with established tech hubs?
We’ve had several entrepreneurs from Israel move here, and one thing they found was that they could get access to leading doctors and researchers at the University of Miami and get new technologies into hospitals.
If you’re in Palo Alto, everyone is trying to get into Stanford. There’s tremendous competition for attention. Here, because the ecosystem is still developing, there can be more opportunity to get that time with people and institutions.
That can be very valuable for a startup. You need customers, partners and people who are willing to try something new. Sometimes being in a market that is still growing gives you an advantage.
What does a Florida-born startup look like in practice?
One example from our portfolio is Flex Moving and Storage. It started in Miami and built a native AI platform around moving and storage.
The company manages a fleet of roughly 1,700 trailers, while people with pickup trucks can take jobs through its marketplace. The technology handles a lot of the routing and coordination that would traditionally require much more infrastructure and staff.
It started in Miami in year one, expanded across Florida, then moved into Texas, and now it’s spreading across the country. I think we’re going to see more companies follow that kind of path: start here, prove the model, and then expand nationally.
Miami played a good role in allowing the company to get started. And increasingly, we find employees want to move here too.
How significant is AI for the current generation of entrepreneurs?
I think we are still in the early innings of a very large technological and economic shift. What excites me most is the productivity improvement.
Across companies we invest in or evaluate, we’re seeing cases where AI can create three times, 20 times or even greater productivity improvements for certain tasks. That changes the economics of building a company.
Take Angle Health, where we were early investors. It built a technology-driven health insurance business and now has around 100 employees while handling more than $1 billion in premiums. A traditional health insurer at that scale might require significantly more people.
AI can handle processing, scheduling and a lot of the repetitive back-office work. That means companies can grow revenue without necessarily growing their cost base at the same rate. Ultimately, that can mean lower costs and better service for customers.
There are risks. AI can make mistakes, and there are security concerns. But every major technology comes with trade-offs. The goal should be to manage those risks while continuing to develop the technology.
How is AI changing the way Blumberg Capital operates?
We’re using AI everywhere we can. One area is deal flow. We can track people across the ecosystem: where they work, what they’ve produced, what they’ve published and what kind of technical background they have. That allows us to identify interesting people and reach out proactively before they necessarily come to us.
Then there’s filtering. We receive roughly 2,000 to 3,000 business plans a year and invest in about 10 companies. AI can help us quickly identify companies that simply aren’t a fit. Maybe they’re consumer businesses and we focus on B2B, or they’re outside the markets where we invest.
We also use it when preparing investment memos, summarizing companies, examining risks and looking at different potential outcomes.
And we’re using more AI in quarterly reporting. A lot of the work involved in moving numbers between formats or processing information is time that people could spend doing something more valuable.
What should founders take away from that?
You should have a lean-forward attitude toward these tools. If someone on our team wants to try a new AI tool, generally we want to give them permission to experiment.
The important thing is that AI should make people more productive. Think about what the tractor did for the farmer. Agriculture didn’t disappear – it meant one person could accomplish much more.
Founders should be asking where AI can remove repetitive work, make decisions faster, improve service or allow a small team to operate at a scale that previously required a much larger organization.
What are LPs looking for after a difficult few years for venture?
One of the biggest things is DPI. There has been a lot of TVPI, or total value relative to invested capital, but LPs have been waiting for actual distributions.
We’re now beginning to see more of that liquidity. The market went through a difficult period after interest rates rose sharply in 2022. Companies saw slower sales, IPOs were delayed, and that created a kind of second J-curve for venture portfolios.
Now some of that is beginning to work through the system. That’s important because when capital starts coming back, it encourages LPs, venture firms and entrepreneurs to do more.
What advice would you give investors who want exposure to the AI boom?
One of the biggest changes investors need to understand is that technology companies are staying private longer.
In an earlier generation, companies such as Amazon, Microsoft and Google went public at relatively modest valuations compared with what they eventually became. Public-market investors participated in a huge amount of that growth.
Today, companies can become extremely valuable while they are still private. If you wait until these businesses reach the public markets, you may have missed a significant portion of the value creation.
That means investors who want exposure to this technology cycle should at least understand the private markets and venture capital. But they also need to be cautious. Not every company works.
Historically, perhaps one or two companies out of 20 in a venture portfolio can be truly exceptional. That’s why diversification matters. If you’re investing as an angel in individual companies, you need a broad portfolio. Funds can provide another way to spread that risk across many companies.
Has the opportunity already passed for investors who weren’t early to AI?
No. I still think it’s very early.
This is going to play out over decades, and the pace is accelerating. The models are improving incredibly quickly, and we’re seeing productivity gains that I don’t think most people fully understand yet.
But being optimistic doesn’t mean abandoning skepticism. Investors still have to look carefully at valuations, business models, teams and whether the technology is creating something customers actually need.
There will be companies that fail. There will be technologies that don’t work the way people expect. That is part of venture capital.
What makes this period so interesting is the scale of what entrepreneurs can now build. For founders in Miami and elsewhere, there are more tools available to turn a small team and an idea into a very large company. I think we’re still at the beginning of seeing what that means.
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