While it may seem like an obvious use of AI, VC’s have been slow to adopt it for deal-making. But now it is transforming the industry, many VC’s are gaining an edge by analyzing and vetting their investment opportunities using big data and deep learning.
AI aims to revolutionize traditional deal sourcing, while deal teams are using it to predict what their next success will be. By leveraging data from trends, funding information, and company scorecards, they can get specific recommendations on new deals and add-on acquisitions. In addition, today’s firms are using advanced computing on not only external and performance data but also human predictions, judgments, and decisions to achieve a competitive advantage.
AI also stretches way beyond just investing, it can also optimize other success stages such as sourcing, diligence, placing the investment, and adding value to a company once it is invested in. Then for portfolio companies, it can help them grow by analyzing and researching their markets, recruiting top talent, creating business strategies, telling the company how to price its products, and even how to differentiate to better itself.