How should these findings affect the way VC firms use AI in decision-making?
“I certainly don’t think that AI can help you make a good investment, and I am doubtful that it can help you avoid one either. Most of the reasons bad investments go bad come down to people – the quality of decision-making in the team – or the fact that the way the financial data is collected, controlled and analysed is poor in the first place.
“I do see an important role for AI in public markets, where there are masses of information available, from individual analyst forecasts to consensus forecasts and company histories. That information can be pretty impenetrable and so funds could use AI to analyse that information effectively and find patterns that lead to better decision-making. In private markets, however, I have a hard time seeing what role AI can play.”
Anne Glover
“VCs need to approach AI with a clear understanding of its strengths and limitations. AI and machine learning can provide valuable insights and streamline the investment screening process when there is ample and relevant data available. However, it’s important to remember that AI is not a silver bullet, and human judgment remains a crucial component of the decision-making process, especially in the VC world, where innovation and disruption are key. The findings of my research should not be interpreted as a dismissal of AI in VC, but rather as a call to use it judiciously, recognising where it adds value and where human insight cannot currently be substituted with data technologies.”
Maxime Bonelli