Venture capitalists are often blamed for having ‘herd mentality’, but when you are managing someone else’s money, it is prudent to be safe rather than sorry. After all, being a VC is a job and no one likes to lose his job.
And like in all spheres of humanity, where people are now demanding faster, accurate, cheaper and more reliable alternatives using AI; how could venture capitalism could have been left untouched.
Gone are the days of analysts, well almost.
A venture capital firm named EQT VEnture has designed an AI system, based on convolutional neural networks or CNNs, which helps them decide where to invest.
‘Motherbrain’ has helped the firm scan almost 10,000 companies for investment, in a short period of time, which by all means would not have been possible in the traditional ‘analyst way’ which VC firms work.
More companies being analysed has a direct correlation with more number of hits scored by a VC firm.
Also, many a times due to inherent flaws in any human, a potential company, is often overlooked (and there are hundreds of such glorified stories in the VC world) which could be spotted by an AI system like ‘Motherbrain’.
Soon, there would be a time when a VC firm would only have partners and then an AI system. Too early, may be later, but it is an interesting thing to watch.