Automation is coming for venture capital, and one young VC firm is betting its homegrown tech gives it an edge over Sand Hill Road’s slow-to-adapt legacy investors
Venture capital investors have pumped billions of dollars into automation and Artificial Intelligence technology. But they’ve been slow to recognize the potential of automation in their own industry.
Base10, a two-year old San Francisco VC firm, wants to change that.
On Thursday, the firm announced a new tool, built in-house, that harnesses the power of AI and applies it to the process of investing in startups. The new tool, which the VC firm calls Base11, taps into publicly available data and automates tasks like sourcing, screening and researching potential deals.
Although intuition and other human traits are critical investing skills that machines can’t match, the small team of investors at Base10 believes technology like its Base11 can give them an important leg up over more established VC firms.
“Ten years ago when I arrived in Silicon Valley, this was a cottage business,” Base10 cofounder and managing partner Adeyemi Ajao told Business Insider. “If you’re a venture firm, if you don’t get good at sifting through massive amounts of data, fast, you’re not going to be in business in 20 years. We’re at the very beginning of understanding how much venture capital is no longer a cottage.”
Ajao, together with Base10 principal Rexhi Dollaku and head of quantitative research Angelica Willis, explained that Base11 is already functionally operational as a transparent tool the team uses to automate repeatable processes across the firm. Instead of a “black box” algorithm that some other venture firms use, Dollaku and Willis said Base11 uses publicly available data about companies or industries the group is interested in investing in. In fact, Dollaku said Base11 is responsible for about 70% of the firm’s portfolio.